2022 has gone by pretty quickly compared to 2020, which seemed like an eternity, but so much has happened (and will continue to happen in early 2023) that it could soon become historic. In addition to US politics and elections, the Russian/Ukrainian war and other serious events, we have had to go through a dramatic collapse in the crypto space.
The collapse of Three Arrows Capital, the collapse of Terra’s stablecoin ecosystem (doesn’t seem so “stable” now?), and the FTX disaster were all very notable, with thousands on the market. resulted in a loss of billions of dollars. Space value. Some say the collapse is so severe that it could lead to the collapse of the entire market. Others say it’s a natural shake-off that makes a space healthier in the long run.
Losses range from 50% to almost 80% on some of the largest coins. Stock markets have also taken a hit in 2022, but the S&P’s 18% loss isn’t nearly as bad as the crypto space’s losses.
Figure 1: Performance of Top Cryptos in 2022
In addition to the high losses, correlations between coins have also skyrocketed and what we are looking at is structural in nature, not just for any particular exchange, fund or coin, but for the entire crypto concept. It shows that it affects the underlying assumptions.
Figure 2: Top crypto statistics for 2022
Figure 3: Top crypto correlations for 2022
We’ll have to wait and see, but for now there are more questions than answers about what exactly happened with FTX. And the cracks seem to continue to grow (Silvergate is starting to shake this year), and whether cryptocurrencies are just hot, artificially pumped, or space is recovering and rust is being shaken off. A step-by-step result.
With more events coming up in 2023, we’ll be keeping an eye on this space and keeping our readers up to date, so stay tuned!
Dmitri Alekseev is the founder and CEO of alphabota collaborative platform for alternative investment research
The views expressed in this article are those of the author and do not necessarily reflect those of AlphaWeek or its publisher, The Sortino Group Ltd.