The Biggest Crypto Industry Failures in 2022

Few would dispute the fact that 2022 has been a disastrous year for the crypto industry as a whole. It was literally attacked by both internal misfortunes and external problems in the face of government regulators and the tightening of the monetary policy of different countries. But the most important crypto tragedies of the year did not leave even the most thick-skinned crypto enthusiasts indifferent.

Luna and UST Collapse

Then the Luna token was one of the leaders in terms of capitalization, in April 2022, the Luna token showed an active growth in price and even updated its historical maximum at $119.5. However, everything changed the very next month, on May 8. On this day, the stablecoin TerraUSD (UST) temporarily lost its peg to the US dollar after one of the users sold almost $300 million worth of UST at once.

By May 11, UST fell to $0.4, and Luna – to $4.5. However, this was only the beginning of the disaster. On the same day, prices continued to fall: the Luna rate dropped to a minimum since the beginning of 2021 at $1.2, and UST quotes fell to $0.2. In less than a week, the price of the stablecoin has fallen to $0.05, while the Luna rate has dropped to $0.00013.

More than 1,100 users affected by the collapse of UST and LUNA gathered in open group chats and discussed the possibility of filing lawsuits against Do Kwon, the CEO of Terraform Labs. An investigation has been launched, but no action has been taken against him to date.

Bitcoin and Ethereum Price Crash

In 2021, most cryptocurrencies updated their historical highs, after which their quotes began to decline sharply. In early January, bitcoin was trading within $46,000, Ethereum was worth about $3,600, but the first wave of decline occurred at the end of the month. The price of bitcoin at the moment fell to $35,000, and Ethereum – to $2,400.

Then prices began to recover, by the end of March, the bitcoin rate reached the values ​​of the beginning of the year, and Ethereum approached them. However, the situation around Terraform Labs, described in the first part, put serious pressure on the quotes of the largest cryptocurrencies, as a result of which they began to fall like an avalanche.

In May, Bitcoin slowed down its fall at $29,000 and continued to trade sideways, while Ethereum fell to $1,800. Already in mid-June, the downward trend intensified, and cryptocurrencies updated their local lows. For bitcoin, this was the mark of $17,500, and the Ethereum rate fell below $900.

Until autumn, cryptocurrencies traded in a relatively narrow price range, but in November, a new collapse occurred on the news of the bankruptcy of FTX. Ethereum dropped to $1,000, but still did not update the summer low. But the bitcoin rate for the first time in two years fell to $15 400.

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As of December 30, cryptocurrencies partially won back the November fall. Bitcoin is trading at $16,500, Ethereum – at $1200. Since the beginning of 2022, their quotes have decreased by 63.5% and 66.7%, respectively.

FTX Bankruptcy

The biggest failure in the world of cryptocurrencies in 2022 can certainly be called the sad experience of FTX. Until recently, the FTX crypto exchange ranked second in the world after its main competitor, Binance. That all changed on Nov. 2, with the publication of a revelation that FTX was backed only by FTT tokens issued by its subsidiary, Alameda Research.

The investigation caused concern among investors, among whom were well-known and reputable funds Sino Global Capital, Tiger Global Management, Third Point Ventures. Investors have started selling their FTT tokens. On November 7, a message appeared on the exchange’s website stating that the withdrawal was suspended, and on November 11, FTX filed for bankruptcy.

Wrapping 2022 Up

Looking at the high-profile scandals and bankruptcies of the past year, the tightening of monetary policies and the downward dynamics of the leading cryptocurrencies, many analysts predict a protracted crypto winter.

Also, crypto investors need to be flexible and ready for any changes in the possible regulation of crypto. So, for example, Litecoin’s new privacy features now make cryptocurrency transactions illegal in South Korea, as a result of which the largest Korean crypto exchanges announced the delisting of the token. If this applies to you as well, you can swap LTC to BTC or another crypto without registering on Godex exchange.

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