Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7011689465077256192
Bloomberg How #Crypto #Broke in 2022: How the 3-#Trillion-#Dollar #Crypto #Coins-#Tokens #HouseOfCards #Unraveled: Nice review of what you have been reading in-depth on this feed over the years: https://lnkd.in/g7aYNWdu :
“#CryptoWinter” is the industry term for the chill that descended on the market in 2022, and #contagion was the name of the #game. After the collapse of the #TerraUSD #algorithmic #stablecoin, major #crypto players fell like #dominos: #ThreeArrowsCapital, #VoyagerDigital, #CelsiusNetwork, #FTX, #BlockFi.
The hits kept coming, but it wasn’t all #downside – at least at first. The #SuperBowl featured #celebrity-filled #commercials for #crypto companies including #Coinbase and #FTX. There were #crypto #conferences in the #Bahamas and #Miami, with #glitzy #parties. And the industry’s #prominence grew in #Washington, as lavish #political #giving and an #army of #lobbyists signaled its increasing #influence there.
Still, #crypto #prices kept #falling. #Bitcoin – the largest #token by market value – plunged more than 60%, leading a rout in digital assets that erased some $2 trillion in total market value from the highs of November 2021. #SBF went from being described as a modern #JPMorgan to being arrested and accused of multiple crimes including #fraud. And #NFT prices fell back to earth.
One of the central tenets of #crypto, and of the #blockchain, is the idea of #decentralization: that no one entity is in charge, and no one player could destabilize the rest. What 2022 showed, as we had warned even before, more than once, is that the digital-asset #ecosystem is significantly more #interconnected and #concentrated than even its biggest participants might have realized.
The #Terra ecosystem operated two major #tokens: #Luna, a #cryptocurrency, and TerraUSD (UST), a stablecoin that tried to stay at $1 by maintaining a ratio with the amount of Luna in circulation. In May, UST began a steady decline away from its #dollar #peg, eventually tanking both #coins to zero. Shock waves from the implosion reverberated throughout the market, setting the stage for more #blowups.
Many companies invested in #Terra or its parent #TerraformLabs, typically by holding Luna tokens or UST stablecoins. This includes firms like #Hashed, #Jump and #Pantera – as well as the investment arms of #Coinbase, #Binance and #GalaxyDigital which posted a $555 million quarterly loss in August.
#Hackers stole about $600 million from #Ronin, the #blockchain #bridge platform connected to online game Axie Infinity. Binance invested in its creator Sky Mavis when it raised $150 million to help plug the hole.
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