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January 2022
Total Crypto Market Capitalization: $2.22 billion
Federal Reserve Target Interest Rate: 0.00% – 0.25%
Consumer Price Index, 12-month change: 7.5%
Buzzword of the month: DeFi 2.0
The year began with crypto markets still riding high, but with macroeconomic warning signs blinking. Supply chain issues and inflation are covered ad nauseum, but the Federal Reserve indicates they will hold interest rates steady for now. Bitcoin network transaction volume surpassed that of American Express in 2021. The competition for NFT sales, and the lucrative fees for marketplace operators, heats up with LooksRare launching a vampire attack on OpenSea, the industry leader – a theme that continued throughout 2022. Tesla starts accepting Dogecoin. Twitter integrates NFTs as profile pictures. News breaks that the CFO of OHM-fork Wonderland, known as 0xSifu, is actually Michael Patryn – the disgraced owner of defunct Canadian crypto exchange QuadrigaCX.
February 2022
Total Crypto Market Capitalization: $1.76 billion
Federal Reserve Target Interest Rate: 0.00% – 0.25%
Consumer Price Index, 12-month change: 7.9%
Buzzword of the month: Personal Boundaries
Solana Pay launches with a focus on enabling point of sales payments on the Solana blockchain. Wormhole, a bridge servicing most major blockchains, is hit by the second largest DeFi hack ever and their parent company fills the $320 million hole. Meta adds personal boundaries for digital avatars in an attempt to address digital harassment. China launches their Digital Yuan at the Winter Olympics in Beijing. Crypto companies feature heavily among Super Bowl advertisers. Pressure mounts on the Federal Reserve to act on inflation. Ukraine’s parliament passes a wide-ranging law legalizing crypto four days before Russia invades.
March 2022
Total Crypto Market Capitalization: $1.92 billion
Federal Reserve Target Interest Rate: 0.25% – 0.50%
Consumer Price Index, 12-month change: 8.5%
Buzzword of the month: Cross-Chain
Ukraine’s government crowdfunds $30 million worth of crypto donations in the week following Russia’s invasion. Andre Cronje, developer of Fantom and Yearn Finance, says he’s packing his bags and leaving DeFi for good just weeks after launching Solidly. Aave launches V3, enabling cross-chain transactions, across several EVM-compatible chains. Sushi deploys Trident which allows any user to create an automated market-maker. Maple Finance, provider of undercollateralized loans for institutions, originates its one billionth dollar in loans since its founding 10 months prior – their largest loan is to trading firm Alameda Research. Exxon Mobil announces plans to use unspent natural gas at its plants to power Bitcoin mining rigs. Ronin Network Bridge, the home of play-to-earn giant Axie Infinity, is hacked for $625 million – the bridge had only 9 validators.
April 2022
Total Crypto Market Capitalization: $2.15 billion
Federal Reserve Target Interest Rate: 0.25% – 0.50%
Consumer Price Index, 12-month change: 8.3%
Buzzword of the month: Quantitative Tightening
The Federal Reserve makes clear they will begin reducing their balance sheet. The Luna Foundation Guard (LFG) announced hundreds of millions of dollars in purchases of Bitcoin (BTC) and the Avalanche token (AVAX) as reserves for their stablecoin UST. Stripe enables crypto payments denominated in USDC. Ethereum L2 Optimism announces plans for the decentralization of their governance, piloting a bicameral system of token holders and non-transferrable rights. Frax launches FPI, an inflation-adjusted stablecoin project.
May 2022
Total Crypto Market Capitalization: $1.71 billion
Federal Reserve Target Interest Rate: 0.75% – 1.00%
Consumer Price Index, 12-month change: 8.6%
Buzzword of the month: Death Spiral
LFG adds $1.5 billion to their UST reserves. Binance invests in Twitter. UST drops off peg and begins a death spiral of selling off LFG collateral and minting more LUNA. FTX announces an acquisition of a stock trading platform in a purported bid to expand their operations beyond crypto. Uniswap sees its one-trillionth dollar traded. Tether experiences a $16 billion run as fear, uncertainty, and doubt surrounding stablecoins spreads after UST collapse, but Tether’s redemptions withstand the stress.
June 2022
Total Crypto Market Capitalization: $1.30 billion
Federal Reserve Target Interest Rate: 1.50% – 1.75%
Consumer Price Index, 12-month change: 9.1%
Buzzword of the month: Contagion
PayPal enables external transfers for their crypto wallets. Ethereum continues its years-long march towards Proof-of-Stake with a successful merge on the Ropsten Testnet. Celsius suspends withdrawals hours after a statement of confidence from CEO, and later admits to significant exposure to UST. Luna contagion continues to spread as Three Arrows Capital faces insolvency and is later ordered into liquidation. The Federal Reserve bumps interest rates up .75%, the largest increase since 1994. Voyager borrows from Alameda Research to shore up insolvency due to their UST exposure, BlockFi borrows from FTX. Uniswap Labs acquires NFT marketplace aggregator Genie.
July 2022
Total Crypto Market Capitalization: $876 million
Federal Reserve Target Interest Rate: 2.25% – 2.50%
Consumer Price Index, 12-month change: 8.5%
Buzzword of the month: Zero Knowledge Proofs
FTX acquires BlockFi. Three Arrows Capital files for bankruptcy. Voyager files for bankruptcy. Reddit opens an NFT marketplace allowing users to mint profile pictures as NFTs. Gamestop opens NFT marketplace. Celsius files for bankruptcy, capping a disastrous couple months for centralized crypto lenders. Lido Finance launches its staked ETH derivative stETH on L2s in preparation for the Ethereum Merge. Polygon announces zkEVM: a zero-knowledge proof-based rollup fully compatible with the Ethereum virtual machine. Curve Finance reveals they are working on a stablecoin. Aave DAO approves a proposal to launch a crypo-collateralized stablecoin.
August 2022
Total Crypto Market Capitalization: $1.08 billion
Federal Reserve Target Interest Rate: 2.25% – 2.50%
Consumer Price Index, 12-month change: 8.3%
Buzzword of the month: Royalty Free
US Treasury sanctions a list of Tornado Cash blockchain addresses. Ethereum clears its final pre-Merge hurdle with a successful transition to Proof-of-Stake on the Goerli Testnet. Sudoswap joins the decentrailized NFT marketplace frenzy with a royalty-free model spurring competitors to attempt the same. A nonprofit war fund in Ukraine spends $54 million of crypto donations on drones, tactical gear, and other equipment to support their war effort. Ethereum L2 Arbitrum launches their Nitro upgrade to cut transaction costs. MakerDAO initiates the first ever DeFi integration with a traditional bank by opening a $100 million loan to Huntingdon Valley Bank. Compound launches Compound III dropping cTokens in favor of depositors retaining ownership of their collateral.
September 2022
Total Crypto Market Capitalization: $988 million
Federal Reserve Target Interest Rate: 3.00% – 3.25%
Consumer Price Index, 12-month change: 8.2%
Buzzword of the month: The Merge
Starbucks announces Odyssey, an NFT-based loyalty program. The Ethereum execution layer successfully and uneventfully merges with the Beacon Chain, bringing Proof-of-Stake to the second largest blockchain network (first by transaction volume). The Merge is expected to reduce Ethereum’s energy usage by over 99%. T3 Trading and 1GCX set up a $100 million liquidity pool for trading tokenized carbon credits.
October 2022
Total Crypto Market Capitalization: $939 million
Federal Reserve Target Interest Rate: 3.00% – 3.25%
Consumer Price Index, 12-month change: 7.7%
Buzzword of the month: MEV
Solana lending protocol Mango Markets is exploited for $112 million by a group claiming they acted within the parameters created by the protocol. Flashbots unveils SUAVE, a project created to more equitably distribute the benefits of Maximum Extractable Value (MEV) from Ethereum blocks. Ethereum developers also note focus MEV protections as part of their post-Merge roadmap. The Bitcoin whitepaper celebrates its 14th birthday.
November 2022
Total Crypto Market Capitalization: $1.02 billion
Federal Reserve Target Interest Rate: 3.75% – 4.00%
Consumer Price Index, 12-month change: 7.1%
Buzzword of the month: SBF
Binance CEO Changpeng Zhao makes public on Twitter plans to sell off Binance’s FTX Token (FTT) holdings. The FTT token draws scrutiny over the next couple days and FTX experiences a run. Binance discloses conversations to buy FTX, but then pulls out of the supposed deal. FTX and Alameda Research file for bankruptcy. Caught up in the FTX collapse, BlockFi files for bankruptcy. The Aave DAO disables a long list of low-liquidity assets from being used as collateral on their protocol.
December 2022
Total Crypto Market Capitalization: $858 million
Federal Reserve Target Interest Rate: 4.25% – 4.50%
Consumer Price Index, 12-month change: N/A
Buzzword of the month: Just keep BUIDLing
Inflation has trended down for several months and the Federal Reserve finally slows the pace of interest rake hikes with a half point increase in December. Chainlink launches staking of its native token LINK. Mango Markets and Aave exploiter Avraham Eisenberg is arrested in Puerto Rico for commodities manipulation. Donald Trump releases a line of NFT trading cards. Stablecoin volume set a new record for 2022 surpassing every major credit card provider with the exception of Visa.
References:
https://coinmarketcap.com/charts/
http://www.fedprimerate.com/fedfundsrate/federal_funds_rate_history.htm
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
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