Crypto’s wild year, in numbers

Crypto’s wild year, in numbers

‘Tis the season to review crypto’s historic, tumultuous year. [Andriy Onufriyenko via Getty Images]

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

Crypto’s wild year, by the numbers. We’re reviewing the highs and lows of 2022 with the year’s most important crypto stats.

4 CEOs assess the state of crypto. As crypto’s tumultuous year winds down, here’s what some prominent leaders are saying about the industry’s future.

The latest Coinbase news. How to gift BTC this holiday season and a report on 2023 themes to watch.

YEAR IN REVIEW

The key numbers behind crypto’s historic, tumultuous year

One calendar year in the cryptosphere always manages to somehow feel closer to a decade thanks to the velocity of innovation and the volume of headline-making stories. 2022 gave us plenty of news to keep up with — some good, some, well, not so good. From Ethereum’s historic eco-friendly upgrade to FTX’s infamous collapse, here’s a review of the numbers that account for the highs and lows of crypto’s turbulent, decade-long year.

$2 trillion

Approximate value that the crypto market has shed since peaking near $3 trillion in November 2021. The total value of the crypto market as of December 20 is roughly $850 billion, near lows for the year, and pressured by ongoing inflation and recessions fears, as well as liquidity crises and firm insolvencies in the crypto space.

$18.3 billion

Amount of venture capital raised by crypto startups during the first three quarters of 2022. While that figure is lower than the $23 billion raised by crypto startups in the same span last year, steady VC investment in web3 has defied bear market headwinds. 

$135 million

Amount of crypto donations raised for Ukraine in the first three months after Russia invaded in February. BTC, ETH, and stablecoins including USDT, USDC, and DAI accounted for most of the fundraising, and because crypto assets enable near-instant, cross-border donations, Ukraine was able to quickly use funds for supplies like medical kits, bulletproof vests, surveillance drones, and food. 

2.4 million 

The approximate number of new users who made a trade using a decentralized exchange via Polygon in 2022. Polygon’s new-user growth rate this year accelerated faster than both Ethereum and Solana in the same time period.

208,000

Number of USD Coin (a stablecoin redeemable for $1) addresses with balances over $1,000 as of this month — an all-time high. This development was likely bolstered by several Coinbase initiatives, including waiving fees for converting USDT into USDC, and when buying or selling USDC with any global fiat currency supported by the exchange.

114

Number of nations that are exploring their own “central bank digital currencies.” CBDCs are a completely digital version of government-issued money. Unlike Bitcoin, CBDCs are centralized legal tender, created and controlled by a government or central bank. Like Bitcoin, they can be used for fast and inexpensive global payments.

99.95%

The energy-efficiency improvement of Ethereum after the network completed its long-awaited Merge in September. The upgrade changed how the second-largest blockchain verifies transactions, replacing the energy-intensive Proof of Work method for the more eco-friendly Proof of Stake.

96%

The price decline of Terra’s LUNA token in a 24-hour period in May, shortly after the crypto’s related stablecoin, TerraUSD, a so-called algorithmic stablecoin, lost its peg to the dollar and prompted both of Terra’s undercollateralized tokens to collapse. The ensuing $30 billion wipeout sent shockwaves through the crypto industry that prompted liquidity crises for firms including Celsius, Three Arrows Capital, and more.

14

Age, as of October 31, of Satoshi Nakamoto's Bitcoin whitepaper, which outlines the core mechanics of the cryptocurrency. Next month, on January 3, Bitcoin will celebrate the 14th anniversary of the first transaction ever recorded on the network. The message inscribed in the “Genesis Block'' referenced a newspaper headline about the Great Recession, a key factor in Bitcoin’s creation: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

9.1%

This year’s peak inflation reading, from June’s Consumer Price Index, which indicated the U.S. was seeing the worst year-over-year inflation increase in 41 years. Red-hot inflation, and the Federal Reserve’s attempt to combat it by raising interest rates, have pressured most markets in 2022, especially riskier growth assets like tech stocks and crypto.

8

Number of charges that Federal prosecutors in Manhattan have brought against Sam Bankman-Fried, the now-infamous former CEO of FTX. A day after SBF was arrested in the Bahamas, U.S. prosecutors unsealed a 13-page indictment, which included counts of securities fraud, wire fraud, and multiple conspiracy counts including money laundering and campaign finance violations. FTX, once valued at $32 billion, is currently in the bankruptcy process. Current CEO John Ray III, who oversaw Enron’s bankruptcy, said of FTX in a filing: “Never in my career have I seen such a complete failure of corporate controls and absence of trustworthy financial information.”

#1 

Vietnam’s ranking on Chainalysis’s 2022 Global Crypto Adoption index, the second straight year that it held the top spot. The report, which ranks 146 countries is based on five weighted metrics, such as centralized exchange trade volume and peer-to-peer trade volume.

TOP BRASS

Four CEOs discuss the future of crypto

As 2022 enters its final stretch, many leaders inside and outside the crypto industry have been surveying the broader landscape after a historically challenging year. This week we’re taking a look at what the CEOs of Goldman Sachs, BlackRock, Uniswap Labs, and Coinbase are thinking about the state of the cryptocurrency industry heading into 2023.

David Solomon, CEO of Goldman Sachs, wrote an op-ed in the Wall Street Journal arguing for the potential use-cases of blockchain technology.

  • In a piece titled “Blockchain Is Much More Than Crypto,” Solomon argued that “cryptocurrencies are only one of blockchain’s many applications,” noting that Goldman has already used a private blockchain to reduce the settlement time of an international bond sale from the traditional days-long period down to one minute.

  • Solomon also said that blockchain tech has the ability to make the financial system “more transparent” and “more accessible” with smart contracts and tokenization. The former can enable automatic, trustless trade executions between parties, while the latter could allow smaller investors to break into high-barrier markets like real-estate funds — “you could buy fractions of individual buildings … No longer would real estate investing be the preserve of the ultraweathy.”

Larry Fink, CEO of BlackRock, the world’s largest asset manager, recently discussed the adverse macro climate for crypto businesses — but pointed to the promise of tokenization.

  • At a New York Times conference earlier this month, Fink offered a sobering, post-FTX take on the crypto industry: “I actually believe most of the companies are not going to be around.” But that negative outlook was countered by a big endorsement of crypto technology from the former crypto skeptic: “I actually believe this technology is going to be very important,” said Fink. “I believe the next generation for markets, the next generation for securities, will be tokenization of securities.”

  • In August, BlackRock partnered with Coinbase to offer institutional clients direct access to crypto trading via the asset manager’s Aladdin investment platform and its inaugural spot BTC private trust.

Hayden Adams is the creator of Uniswap, a prominent decentralized exchange, and the CEO of Uniswap labs. In an opinion piece for The Economist, he described the opportunities of decentralized finance.  

  • Linking the failure of several centralized firms — FTX, BlockFi, and Celsius — to, in part, a lack of transparency about customer funds, Adams noted that still-nascent DeFi technology will ultimately provide greater visibility and better consumer protection.

  • “In DeFi, where data and analytics are free and publicly accessible, the balance-sheets supporting lending or trading are transparent,” wrote Adams. “Anyone with an internet connection can track a protocol’s assets and liabilities on a per-second basis.”

  • The Uniswap creator also articulated the benefits of DeFi’s self-custody model, in which users can directly connect crypto wallets to trading and lending protocols without “requiring … assets to sit on the balance-sheet of a financial intermediary.”

This week, Coinbase CEO Brian Armstrong outlined a blueprint for regulatory clarity in an article titled “Regulating Crypto: How we move forward as an industry from here.”

  • In his three-part framework, Armstrong aims to “ensure we have regulatory clarity for centralized actors, and a level playing field across exchanges, while preserving the decentralized crypto innovations that will bring enormous benefits to the world.”

  • The first initiative, Armstrong writes, should be to “create regulatory clarity around centralized actors in crypto (stablecoin issuers, exchanges, and custodians).” He outlines potential steps for each and also offers a new approach for differentiating between securities and commodities in the crypto space.

  • For the rapidly evolving world of decentralized finance, Armstrong points out that “transparency is built in by default.” He goes on to say that “self-custodial wallets should be treated as software companies,” while “creating decentralized protocols … should be equivalent to publishing open source code, which is protected by freedom of speech in the U.S.”

AROUND COINBASE

Coinbase CFO Alesia Haas reviews 2022 on the podcast. Plus, last-minute crypto gift ideas

  • In this year’s final episode of the Around the Block podcast, Coinbase CFO Alesia Haas and Sr. Manager of Institutional Research David Duong discuss the key events and takeaways from the year in crypto as well as the opportunities to expand crypto use cases in 2023.

  • Coinbase Institutional has just published its Crypto Market Outlook for 2023, which, against the backdrop of the 2022 crypto winter, presents three key themes expected to prevail in the next year as well as updates on Bitcoin, Ethereum, regulation, and more.

  • Coinbase has published its fourth Transparency Report, which aims to provide customers with data about requests for their information that we receive from government agencies and law enforcement.

  • This holiday season, Warner Brothers Entertainment, Coinbase, and Daz 3D are teaming up on a one-of-a-kind digital collectible project to allow fans to create custom holiday cards with their favorite WB characters. You can send friends and family customized holiday cards featuring characters like Frosty the Snowman, the Scooby-Doo Squad, the Justice League, and more. Head to Coinbase NFT to create yours.

  • Speaking of the holidays, not sure what to give your family and friends? Consider a crypto gift card.

TOKEN TRIVIA

What can you do with a crypto wallet?

A

Send and receive crypto from anywhere in the world

B

Secure and store your private keys

C

Interact with decentralized finance apps

D

All of the above

Find the answer below.

Trivia Answer

D

All of the above