The year of 2022 has been a very dramatic one. Just two months before the beginning of the year, we had the overall crypto market cap topping out at nearly $3 trillion. Bitcoin, the grand old coin of the crypto market touched a fresh all-time-high of $69,000 at one point in November 2021 – but since then the entire crypto market led by the king coin has been on a downtrend.
2022 has been marred by various events that has dented the overall sentiments of the crypto market, and bear markets tend to be full of them. The end of 2021, brought with it the gradual closure of the Covid-19 disaster that had brought the entire world to a standstill. In an effort to prop up the economy, governments across the world went on a currency printing spree that ultimately resulted in the skyrocketing of global inflation levels. Now, as the world returned back to normalcy, central banks resorted to pulling cash out of the market by increasing interest rates which resulted in the overall downfall in the value of all investment assets ranging all the way from equities to even cryptos.
With that context, let’s take a look at some of the most important events that shaped the year and you should know about.
1. TOTAL CRYPTO MARKET CAP FALLS BELOW $2 TRILLION
A crypto market, which had only touched the all-time-high of $3 trillion back in November 2021 within a period of two months only fell down below the critical $2 trillion mark. However, understandably – the journey up had been quite a rapid one and so was the fall. Within the two and a half month period, Bitcoin too fell from around $69,000 at its highs down to below $50,000.
2. THE RONIN HACK: ONE OF THE BIGGEST CRYPTO HEISTS EVER
In the month of March 2022 – according to Sky Mavis, the makers of the extremely popular blockchain NFT game called Axie Infinity – the Ronin Network fell victim to one of the single largest DeFi hacks to date. The attackers were able to steal and get away with approximately 173,600 ETH and 25.5 million USDC, amounting to a staggering total of $624 million as on the day of the hack.
The hack was made possible by compromising private keys on the network. The Ronin Network used a set of nine validator nodes to approve transactions on the bridge and any withdrawal or deposit transaction required an approval by a majority of five of these nodes. the attacker was able to gain control of four of the five validators controlled by Sky Mavis and a third-party Axie DAO validator to sign their malicious transaction and siphon out the funds.
3. INDIA’S 30% TAX ON CRYPTO GAINS GOES LIVE
In the beginning of April, India introduced the 30% tax on all gains made from the transfer of virtual assets. The 30% tax rate on crypto gains will be the same irrespective of the nature of income. That means it does not matter if it is an investment income or business income and is irrespective of the holding period. Additionally, this specific income will be taxable even if taxpayers’ total income is below the threshold limit of ₹2.50 lakh too. Thus, this was one of the most significant moments for the crypto industry in India.
Additional read: Crypto Tax India Guide 2022
4. THE TERRA LUNA – UST DEPEGGING INCIDENT
This incident will be etched in the mind of all crypto participants in the future to come. While the actual figure is hard to put a finger on, the amount of value actually lost in the Terra’s UST depegging fiasco was anywhere between $60 billion to almost $200 billion (according to a report from CNBC). This took place when the algorithmic stablecoin called UST introduced by Terra – which was supposed to maintain a 1:1 peg with the US dollar, lost its peg and within a matter of 24 hours fell below 20 cents.
Read more about it here: Terra LUNA Crypto Crash Explained
5. TOTAL CRYPTO MARKET CAP FALLS BELOW $1 TRILLION
Towards the end of January 2022 – the overall crypto market cap fell below the $2 trillion mark, after having touched near $3 trillion back in November of 2021. Now, less than six months since then, the overall crypto market cap fell below the $1 trillion mark for the first time in 2022. This breakdown below the crucial $1 trillion mark was led primarily by the Terra LUNA crash mentioned above and there was very few who came out of that incident unschathed.
This was also crucial because the last time the overall crypto market cap was around $1 trillion was towards the end of January 2021 – almost a year and a half ago. This indicated the revisiting of the pre-bull run levels, and subsequent selling pressures in the market.
Read more: Crypto Market Cap Trends
6. INDIA’S 1% TDS RULE ON CRYPTO TRANSACTIONS GOES LIVE
In another major development, from the beginning of July 2022 – a Tax Deducted at Source (TDS) rule on virtual digital assets went live in India. In legal terms, the TDS rule mentions levying a 1% TDS on any consideration paid for the transfer of Virtual Digital Assets.
In other words, when you sell a crypto on CoinDCX, you (or the exchange facilitating the transaction) will have to deduct and withhold 1% of the transaction value as TDS, which is then paid to the Government. To know all about this, watch the video below!
7. MUSK ACQUIRES TWITTER
Now, quite understandably at first glance – Tesla chief Elon Musk’s $44 billion acquisition of microblogging platform, Twitter isn’t really a key crypto moment unless you look at the finer writing. While Musk’s acquisition of Twitter has nothing to do with crypto directly, there was a lot of chatter in the market around a Dogecoin integration in Twitter for various of its paid services.
In fact, the anticipation was so much so that, we saw Dogecoin – the largest memecoin by market capitalization (Elon is called Dogefather for a reason!) saw a near 35% rally in a matter of 2-3 days between the acquisition, ranging primarily on 27 October, 2022.
Entering Twitter HQ – let that sink in! pic.twitter.com/D68z4K2wq7
— Elon Musk (@elonmusk) October 26, 2022
8. INDIA SEES THE LAUNCH OF THE ‘BHARAT WEB3 ASSOCIATION’
On the 3rd of November, 2022 – leaders and top members from the Indian Web3 ecosystem banded together to announce the launch of the Bharat Web3 Association (BWA). Leaders in the BWA included founders of Hike, CoinDCX, CoinSwitch Kuber, Polygon, Coinbase, ZebPay, WazirX, ANQ Finance, Biconomy, Liminal, and Tax Nodes.
This initiative was started with the objective to support the development of India’s nascent yet richly talented Web3 ecosystem. It will work with the objective to establish standardised principles for the Web3 industry and to develop India’s talent pool. BWA also seeks to further promote consumer interests by encouraging dialogue among key stakeholders.
9. FTX CRYPTO EXCHANGE FILES FOR BANKRUPTCY
In about a week’s time, beginning a few days into the month of November 2022 – the world’s third largest crypto exchange by trading volumes, valued at over $32 billion at one point in time filed for bankruptcy after a series of events that led to the collapse. The collapse began with the publication of a few internal documents from FTX exchange’s sister company, Alameda Research that was involved in a crypto trading business. The documents showed that the firm was highly overleveraged on its own crypto tokens, the FTT and like a series of dominos falling over – we saw the dramatic collapse of the FTX crypto exchange, built by the poster boy of the crypto world – Sam Bankman-Fried.
Additional read: FTX Collapse Explained
10. BITCOIN PRICE TOUCHES TWO YEAR LOW
Directly as a result of the FTX collapse, the overall crypto market – led by the king coin, Bitcoin touched a fresh new two year low in the early days of November. Bitcoin price touched lows of around $15,500 briefly before quickly recovering from those lows. Since then, BTC price has recovered back to around $17,500 as of writing but overall things still look quite weak.
Read more: Bitcoin Price Prediction