The Year in Review
Hello fellow crypto enthusiasts!
As we come to the end of the year, it’s a good time to look back at the events that shaped the crypto market in 2022. It’s been an exciting year to say the least, with plenty of highs and lows. In the year end edition of our newsletter (download the full report here) we take a dig at some of the major events and analysis from the Crypto World.
- First and foremost, we saw British bonds, traditionally seen as a safe asset class, briefly underperform compared to cryptocurrencies. This was a surprising development, and one that led to a major bank intervention. Bonds started moving in 100s of Bips instead of the usual 10s or 20s, indicating a level of volatility that is not typically seen in this asset class.
- Big Techs are not invincible, This was the year in which those decrying the over-valuation of tech stocks finally got to say ‘I told you so’. Tech stock valuations have plummeted and some have actually performed worse than crypto since June.
- Mercurial: ‘Susceptible to sudden and sweeping changes’ — 2022 has witnessed a drastic bear kingdom , however the long term trend, the long term return since 2015 is worth analyzing. The cumulative returns of the two largest crypto-currencies in BTC and ETH have been better than all other classes of asset. This stays true for every consecutive three year period.
- FTX and LUNA are dead but Crypto Lives — Though the FTX and LUNA have crashed and emptied the pockets of the investors, crypto is still alive. Total value locked in Defi has dropped from the peak of $250Bn in Nov 2021 to $42.1Bn as of 15 December 2022. Although this is a dramatic decline, there are still 1M transactions per day on just the Ethereum network which is just one protocol. It is difficult to explain this as anything other than continuing use of the blockchain in general and decentralized finance in particular.
- Ethereum made a switch to a proof-of-stake model. Even in the midst of all the drama surrounding crypto markets, Ethereum made a switch to proof of stake model.This change has both advantages and disadvantages, depending on your perspective. However, one undeniable benefit is the significant reduction in the environmental impact of the protocol. By moving to proof-of-stake, Ethereum was able to reduce its carbon footprint by over 98%
In summary, 2022 has been an eventful year for the crypto market. We’ve seen unprecedented volatility in traditional asset classes, as well as continued innovation in the DeFi space. As we move into 2023, it will be interesting to see how these trends continue to evolve.
( Sponsored by Bitpanda Custody )
*The information provided in this article by Novum Insights is for informational purposes only, we make no warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the article or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. None of the information provided is intended nor should be relied upon for the purposes of investment.
