2022 has confirmed to be a tumultuous 12 months for initiatives and customers alike within the crypto area. Crypto winter has set in, and the full crypto market cap at present sits at $829 billion as of January 1, 2023 — 64% decrease than a 12 months in the past. Whereas DeFi token costs and the demand for NFTs stay suppressed, builders have continued to develop new and progressive protocols, giving rise to new developments and narratives all through the previous 12 months.

Our complete 2022 Annual Crypto Trade Report covers all the things from the crypto market panorama to analyzing Bitcoin and Ethereum, deep diving into the Decentralized Finance (DeFi) and Non-Fungible Token (NFT) ecosystem and reviewing the Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) efficiency.

The important thing highlights have been summarized under, however you should definitely dig into the total 49 slides on the finish of this web page.

1. After a brutal Q2, the crypto market has been buying and selling sideways within the low $1 trillion vary.

Amid difficult macroeconomic circumstances and a slew of exploits, bankruptcies and debacles within the crypto trade, the 12 months rounded off with a complete crypto market capitalization of $829 billion, which is 64.1% decrease than the $2.3 trillion in the beginning of 12 months.

Q2 2022 was essentially the most brutal interval with the most important drawdown. Subsequently, markets have been drifting sideways, up till FTX’s collapse in November 2022.

Common every day buying and selling quantity final quarter dropped 32.8% from $88.1 billion in Q3 to $59.2 billion in This fall. General, every day buying and selling volumes have steadily trended downwards over the 12 months, averaging at $86.0 billion in 2022.

Actions within the crypto market had been very intently correlated with actions of the US equities market, notably the S&P500 by way of out the primary three quarters of 2022. Nevertheless in This fall this correlation flipped destructive as crypto took a dip on account of FTX, whereas equities noticed a restoration on the finish of the 12 months.

2. Stablecoins shed $27.3 billion regardless of their elevated dominance; in the meantime USDC and BUSD noticed positive factors in market cap.

Crypto buyers turned in direction of safer belongings final 12 months, with the highest three stablecoins Tether (USDT), USD Coin (USDC) and Binance USD (BUSD) growing their dominance within the crypto market. But, the stablecoins market was not spared from outflows, shedding a complete of $27.3 billion or 16.6% by year-end. Most of this loss was recorded in the course of the TerraUSD (UST) collapse in Might 2022. The sector has fared comparatively properly since, regardless of periodic FUD (‘fear, doubt, and uncertainty’) of one other depegging occasion.

The biggest stablecoin USDT noticed a decline in market cap of 15.5% or $12.2 billion in absolute phrases. Conversely, USDC and BUSD every noticed comparable progress of $2.3 billion (+5.5%) and $2.1 billion (+14.7%) respectively.

High decentralized stablecoins Dai (DAI) (-43.4%) and Frax (FRAX) (-43.9%) took comparable proportion losses, though DAI’s $4 billion loss was nearly 5 instances bigger in absolute phrases.

Outdoors of the highest 5, Neutrino USD (USDN) fell out of the highest 15 after depegging in November, with MAI (MIMATIC) taking its place. USDD (USDD), a stablecoin launched in Might, now sits at rank #8, and noticed its market cap hovering round $700 billion since mid-year.

3. The FTX contagion impacted over 1 million estimated depositors, collectors and buyers.

CoinDesk’s article alleged that almost all of Alameda’s belongings had been in FTT tokens issued by FTX. Shortly after, Binance CEO, Changpeng Zhao ‘CZ’ introduced his intention to dump Binance’s FTT token stake. This triggered a financial institution run, which resulted in FTX halting withdrawals, and subsequently submitting for Chapter 11 chapter. It has since been revealed that Alameda was bancrupt post-Terra / Luna crash, and consumer funds from FTX had been used to prop up the failed buying and selling agency.

To call a number of, a number of the severely hit entities are:

• Lending platform BlockFi had $355 million on FTX, and an extra $671 million lent to Alameda.

• Genesis International Trading had $175 million price of inaccessible deposits on FTX, and are at present unable to serve redemptions from its lending product.

• $8 billion on Silvergate Financial institution was withdrawn by depositors in FTX’s collapse aftermath. The financial institution has since laid off 40% of its workforce.

Whereas many firms and establishments have already fallen, it’s possible that many extra are anticipated to observe swimsuit all through 2023. 

4. Main belongings carried out poorly throughout the board, besides Crude Oil and the US Greenback; BTC was the worst performing asset with a 64.2% drop.

Majority of the belongings, like Gold and TLT, closed the 12 months in purple. Of the belongings, Bitcoin (BTC) was the worst performing in 2022, ending the 12 months with a 64.2% decline.

Outperforming all belongings is the US Greenback Index (DXY), attributed to the Federal Reserve elevating rates of interest by way of 2022. But, most of its positive factors had been misplaced in This fall as rate of interest hikes slowed; the DXY dipped -7.4% quarter-on-quarter (QoQ), and noticed solely an 8.0% price return year-to-date. 

Crude oil noticed vital positive factors of up to 63.4% in direction of the top of Q1 on account of surging demand—lifted COVID-19 lockdowns worldwide coincided with a large provide scarcity pushed by the Russia-Ukraine Struggle. Nevertheless, just like the DXY, it has returned most of its positive factors and ended the 12 months solely 6.4% larger.

5. Ether staking sees regular progress to fifteen.8 million by year-end, pushed by Ethereum upgrades.

Regardless of the crypto market hunch, complete staked ether (ETH) noticed a gentle QoQ progress, growing 25% in Q1, 17.8% in Q2, 8.2% in Q3 and 12.5% in This fall 2022. Complete staked ETH closed the 12 months at 15.8 million items, up from 8.8 million. 

Within the first half of 2022, progress of complete staked ETH in validators will be attributed to a bullish Ethereum Merge sentiment. Following a profitable Merge in mid-September, the crypto group started to anticipate the upcoming Shanghai improve – driving its notable progress final quarter.

Lido (LDO) continues to dominate, holding 29.4% of all staked ETH throughout its 29 node operators. Its closest competitor, Coinbase solely held 12.8% of the market. 

Ethereum’s Shanghai improve is anticipated to be applied someday in March 2023, and can permit stakers to withdraw their ETH – and should give rise to a reorganization of the staking leaderboard. 

6. DeFi tokens market cap plummeted 72.9% and noticed derivatives surpass yield aggregators in market share.

In comparison with 2021, the Decentralized Finance (DeFi) market cap shrank by 72.9%, with varied governance and utility tokens dropping over $48.4 billion in worth. The liquid staking class noticed the smallest lower of 25.9% YoY, possible as a result of Ethereum Merge narrative that performed out in Q3 2022.

DeFi protocols took a larger hit in comparison with the remainder of the market, due to beforehand inflated valuations and capital withdrawals. Lending protocols and yield aggregators had been the worst-performing sectors of the 12 months, seeing declines as a lot as 80.5% and 85.3% respectively. Protocols comparable to Convex Finance (CVX) and Alchemix (ALCX) suffered price drops of up to 95.0%.

Regardless of a 65.0% lower YoY, derivatives have maintained their market share at 7.9%, permitting them to surpass yield aggregators – attributed to a surge in reputation of decentralized perpetuals platforms like GMX (GMX) and Good points Community (GNS).

7. Amid first NFT winter, OpenSea’s market share slid to 65.4%, however nonetheless dominates.

The NFT market is on its first bearish cycle – NFT buying and selling volumes throughout the highest 8 chains have plunged by 93.1% from $13.3 billion in Q1 to $1.5 billion in This fall 2022. In parallel, NFT creator royalties have equally decreased by 95%, for the reason that begin of the 12 months.

Amid NFT winter, OpenSea* nonetheless dominates with 65.4% market share of NFT buying and selling quantity, excluding wash trades. Whereas their dominance has decreased by 24.3 proportion factors since January 2022, the rise of Solana NFTs have propelled Magic Eden’s share of buying and selling quantity upwards to 12.5%, by the top of 2022.

Regardless, OpenSea has defended its place towards new NFT market contenders LooksRare (LOOKS) and X2Y2 (X2Y2), which incentivised customers to commerce and checklist fashionable collections on their platform. As an alternative, customers turned to scrub buying and selling to earn these rewards. On LooksRare, 98.5% of complete NFT buying and selling quantity had been wash trades in January 2022. It has since decreased to 75.5% in December 2022, on account of decrease reward emissions.

*OpenSea buying and selling volumes embrace Ethereum, Polygon and Solana

8. Spot buying and selling quantity shrank 67.3% from January 2022, with its largest QoQ decline of 21.2% in This fall 2022.

Spot buying and selling quantity throughout the highest 10 crypto exchanges totalled $1.5 trillion in January, however sank 67.3% to all-year low ranges of $0.46 trillion in December, within the aftermath of FTX’s collapse. The biggest QoQ decline occurred within the final quarter, the place complete spot buying and selling quantity decreased by 21.2% from $2.9 trillion in Q3 to $2.3 trillion in This fall 2022.

Regardless of the open show of centralized dangers, the CEX:DEX ratio remained persistently excessive. Whereas FUD relating to Binance’s insolvency gave DEXs a small increase in market share in November, as on the finish of 2022, CEXs command 92.5% of the market. 

Dwindling volumes are an indication that buyers are withdrawing farther from the market, or leaving it solely by way of CEX off-ramps.

Learn the Report: CoinGecko’s 2022 Annual Crypto Trade Report

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