Following the ecstatic peak levels of the prior year, the crypto market has been exposed to an atmosphere of stimulative monetary strategy, which has ultimately resulted in sell-offs, the meltdown of initiatives such as Terra, insolvencies of CeFi businesses such as Celsius Network and Voyager Digital, and the crescendo downfall of the FTX exchange. This article is all about the top 5 crypto stories of 2022. Let’s take a look at it in more detail.
These top 5 events exemplify that, amidst the mass adoption of cryptocurrency in the past decade, it is still the Land Of the free. Many individuals have advocated for more crypto legislation in reaction to the screw-ups and insolvencies seen in 2022. Many genuinely think that appropriate federal oversight and legislation would have avoided fraudulent activity and theft, as well as reckless loaning and collateralized trading, from generating a complicated situation for investors.
TerraUSD and LUNA’s demise
Terra network and its chief, Do Kwon, became well-known in the crypto market for four years, only to implode. The Luna crypto network crumbled in what is assumed to be the major crypto crash already, erasing approximately $60 billion and rattling the worldwide cryptocurrency market. This story is one of the top 5 crypto stories of 2022 that shook the entire crypto market.
Celsius Network
Celsius Network launched in 2017 and operated similarly to a bank. Users could transfer cryptocurrency and get a to 17% interest, based on the firm’s site, and Celsius would loan money against those reserves. (The year before, regulatory authorities across several states termed Celsius products illegal.) The business precluded its 1.7 million users from trying to withdraw or send money — appreciated at $20 billion at its high point — in June 2022. The corporation filed for bankruptcy in July. According to a court filing, the financial profits tumbled by 80% between March 30 and July 14, 2022.
The Fall of 3 Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, declared bankruptcy. This was accomplished after the issuance of a court order in the British Virgin Islands after lenders defamed the hedge fund for its incapability to remunerate “ claims to a big decrease in cryptocurrency markets. Three Arrows Capital utilized a bold trading strategy that would include trying to identify favorable light collateralized shareholdings in multiple cryptocurrencies. The business was also susceptible to the stablecoin Terra USD and its sister coin, Luna.
FTX and Sam Bankman-Fried
Faith in crypto markets held steady until upsetting disclosures about FTX and sister company Alameda Research popped up in November. Binance CEO Changpeng Zhao voiced growing concerns about FTX’s financial health and ability to maintain its self-issued token, FTT, instantaneously. Traders began withdrawing money from FTX. The FTT price fell from about $26 to $1 in a matter of days and FTX stopped client withdrawals.
After conflating customer funds and investments, the seemingly healthy firm was found to be bankrupt. In late November, FTX declared bankruptcy. BlockFi’s prior bailout was annulled, and the firm was compelled to go bankrupt. The cryptocurrency markets have collapsed.
BlockFi Crash
Today, BlockFi filed voluntary cases under Chapter 11 of the U.S. Bankruptcy Code.https://t.co/adaAx6me4r
The FTX crash exposed many other cryptocurrency companies that were involved with it. BlockFi was yet another company that declared bankruptcy, leaving its users in the lurch.
BlockFi declared bankruptcy on Monday, November 28th, 2022. They were the most visible example of the financial crisis induced by FTX. BlockFi earlier in November announced that it would no longer receive withdrawals due to its “substantial exposure” to the FTX exchange throughout its sister company Alameda. FTX, Alameda, and other associates filed for bankruptcy on November 11.
What to expect from the crypto market in 2023?
It’s worth mentioning that none of the breakdowns we’ve noticed this year have been induced by a shortcoming in blockchain technology on its own. In fact, technology capabilities in the area have proceeded. In 2022, Ethereum decided to upgrade from a proof-of-work blockchain to a proof-of-stake blockchain. Ethereum’s tokenomics have also changed substantially, which many people genuinely believe will help the Ethereum environment’s fate.
While the bear market is running high, altcoins are possibly not where investors would like to be, and that circumstance is unlikely to shift anytime soon. Many altcoins faced a challenging tussle to create credibility during the bull market, a mission that has gotten more challenging now that the market is less solvent. Altcoins will continue to decline until Bitcoin and Ethereum restore. And, just like with earlier bear cycles, many will fade away completely. Yet, the market will definitely recover as blockchain technology is still one of the most advanced technologies.
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