2022 Cryptocurrency Performance Review

2022 flew by fairly quick in comparison with what appeared like an everlasting 2020 however loads of issues occurred (and proceed to occur in the beginning of 2023) that will quickly show to be historic. Alongside US politics and elections, the Russia/Ukraine conflict, and different severe occasions, we needed to expertise a dramatic breakdown within the crypto house. 

The downfall of Three Arrows Capital, the collapse in Terra’s stablecoin ecosystem (doesn’t appear so “steady” now, does it?), and the FTX catastrophe have all been extraordinarily notable, and led to lots of of billions of {dollars} of losses in market worth for the house. The breakdown is so extreme that some folks say it would result in a complete collapse of the market; others say it’s a pure shake off that can make the house more healthy in the long term.

The losses have been starting from 50% to virtually 80% throughout a few of the largest cash. And whereas the inventory market took a beating in 2022 as effectively, the 18% loss for S&P doesn’t really feel wherever close to as unhealthy because the losses within the crypto house.

Determine 1: Efficiency of high cryptos in 2022

Along with the excessive losses, the correlations between the cash have spiked up too, indicating that what we’re seeing is structural in nature and it impacts the assumptions behind the general crypto idea, not only a explicit change, fund, or a coin.

Determine 2: Statistics of high cryptos in 2022

Determine 3: Correlations of high cryptos in 2022

We should wait and see however for now it appears that evidently there are extra questions than solutions on what precisely occurred at FTX. And the cracks appear to proceed rising (now this yr Silvergate is beginning to shake), including gasoline to the fireplace of debate whether or not crypto is simply loads of sizzling air, artificially pumped up, or if the house can recuperate and turn into more healthy on account of going by the rust shake off section.

We are going to hold an eye fixed out for the house and replace our readers as extra occasions happen in 2023, so keep tuned!

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Dmitri Alexeev is Founder and CEO of AlphaBot, a collaborative platform for various funding analysis

The views expressed on this article are these of the creator, and don’t essentially replicate the views of AlphaWeek or its writer, The Sortino Group Ltd.