Kaleidoscope 2022: The Most Shocked Incident Of Crypto Market Throughout This Year

Crypto events that occur throughout 2022. (Photo; Doc. CoinMarketCap)

JAKARTA After a massive bull run in 2021, the crypto market throughout 2022 experienced shocks due to a number of factors. This condition triggered a decline in the price of Bitcoin and cryptocurrencies in general.

The biggest event that has happened so far this year is the collapse of Teraform Labs' cryptocurrency, namely Terra (LUNA) and the Terra USD (UST) stablecoin. Then last November, the bankruptcy of the leading crypto exchange, FTX.

List of Events Most Shag the 2022 Crypto Market

In addition, what are the most events that rocked the crypto market throughout 2022? Let's see a number of events that befell the crypto industry below!

1. Increase in Interest Parts

As is known, the US dollar currency is experiencing inflation. For this reason, the Federal Reserve or the Fed intends to control inflation so that the value of the dollar does not slip.

They have also indicated raising interest rates in the coming year. This makes investors withdraw their funds from the market both crypto and stock.

Due to hints of an increase in interest rates in January 2022, the crypto market is starting to feel the turmoil. Bitcoin and Ethereum slipped 19 percent and 29 percent in that month, respectively.

2. Crypto Company Becomes a Sports Sponsor Raga

A number of leading crypto platforms such as Crypto.com, Binance, Coinbase, and others are competing to enter the sports industry including football in the US, basketball, and football in Europe. The reason is, the industry has an extraordinary fan base in various parts of the world.

In the US LVI Super Bowl event, which is dominated by sponsors from crypto companies. Coinbase is one of the partners with sportsmen and tournaments. They used the screen to install a 60-second QR code to distribute $115 worth of Bitcoin to the audience.

Meanwhile, basketball star, LeBron James, partnered with Crypto.com. Then there is FTX in collaboration with players in the world of sports. The crypto exchange company led by Sam Bankman-Fried collapsed last November.

3. The collapse of Terra (LUNA) and Terra USD (UST)

On May 7, 2022, the cryptocurrency created by Do Kwon's Terraform Labs, LUNA and UST's stablecoin lost more than 99 percent value. UST, which is a stablecoin Terra, where UST's value should be stuck at a dollar value, is the opposite.

UST itself is included in the algorithmic stablecoin type. Stablecoins that take advantage of other crypto reserve funds include BTC, ETH, and others to support UST.

Terra uses algorithms to keep UST pegged to dollars instead of saving dollar reserves. If UST drops below 1 USD, it will print and sell its brother's token, LUNA, in small amounts to maintain its value.

The algorithm overdriven when UST plummeted, printing and throwing LUNA tokens into the market. This generates so many LUNA tokens, so that in a matter of days, the Luna price drops from an all-time high of IDR 1 million nine hundreds per token to 0 rupiah.

The collapse of UST and LUNA caused losses among investors. South Korean local media even reported that LUNA investors committed suicide due to the value of LUNA's inundation.

The South Korean government immediately moved to investigate the matter. They are working with Interpol to hunt down Do Kwon. The US Securities and Exchange Commission (SEC) also criticized the condition. However, until now the founder of Terra is still roaming around and breathing free air. He is also still active on Twitter social media. While the victims are not yet known whether to receive compensation or not.

4. Celsius Network Recovery of Customer Funds

Citing the reasons for "difficult market conditions," Celsius decided to stop its customer withdrawal (withdrawal). Bitcoin, as a result, fell below $23,000, dropping 15 percent.

5. Bitcoin Price Falling Below 20,000 US Dollars

This year has been a disaster for Bitcoin and its investors. For the first time, since 2020, Bitcoin has fallen below 20,000 USD.

The collapse of Bitcoin has an impact on the entire crypto sector. Ethereum trades just above USD 1.000 at the end of June. At the same time, altcoin Solana and Polkadot are trading 90 percent below their all-time high from 2021. Bitcoin price fall also dragged cryptocurrencies in general.

6. Three Arrows Capital (3AC)

Shortly after Terra LUNA's collapse, in June 2022, investment firm Three Arrows Capital (3AC) announced bankruptcy. The hedge fund has filed for bankruptcy after a British-based court Virgin Islands ordered to liquidate the company.

Court filing also showed that 3AC had about USD 600 million on its way to the Terra blockchain, which collapsed in May. Decrypt reported that Three Arrows Capital had a debt of USD 3.5 billion to creditors, including USD 2.3 billion to Genesis.

The investigation was carried out by US financial regulators, the SEC and CFTC. Founders 3AC, Su Zhu and Kyle Davies are reportedly hiding. Both revealed the reason for hiding, due to death threats. However, shortly after that, 3AC co-founder Davies reportedly bought the largest cruise ship worth US$50 million (Rp749 billion).

The purchases were made while their hedge fund company was in the process of being investigated. The hedge fund, Three Arrows Capital, went bankrupt. The cryptocurrency company, also known as "3AC," was closed by the court on June 27 after failing to repay a bitcoin loan from loan giver Voyager Digital in the middle of the month. Apart from Voyager, the Genesis crypto loan company was also affected and bankrupted.

7. Celsius Bangkrut

Still in the same month, crypto lending company Celsius Network suspended withdrawals and deliveries of funds from its platform. The following month, July 2022, Celsius announced bankruptcy. Celsius CEO Alex Mashinsky resigned.

Celsius filed protection for Chapter 11 on July 13, recording a $1.19 billion deficit in its balance sheet. The crypto lending business model comes under scrutiny following a sharp crypto market sell-off driven by the collapse of TerraUSD and Luna's main tokens in May.

"Aset Celsius is shrinking amid extreme volatility, and freezing of its customers accounts is an attempt to stem losses and stabilize its business," Nash said.

Crypto lending platform Celsius went bankrupt because many creditors failed to cover losses. Celsius was affected by the drop in Terra LUNA. For additional information, Celsius Network was founded in 2017 by Alex Mashinsky, Daniel Leon, Nuke Goldstein. The crypto lending company is based in Hoboken, New Jersey, USA.

8. FTX Bangkrut

FTX has become one of the world's leading crypto companies. Sam Bankman-Fried (SBF) and Gary Wang founded a crypto exchange company in 2019. Previously, SBF had founded the trading service for the crypto Alameda Research. However, after FTX was established, SBF focused on FTX. While Alameda was led by SBF close associate Chuck Ellison.

On November 11, FTX officially filed for bankruptcy. The reason is that FTX uses its platform's investor funds to lend to its partner company, Alameda Research. However, Alameda suffered losses and was forced to sell their stablecoin holdings. This condition forced FTX to experience a liquidity crisis.

In addition, FTX executives are also reportedly buying luxury properties using these funds. The SBF was officially arrested by the Bahamas archipelago authorities and extradited to the US. However, in the US, Sam Bankman-Fried was actually released from an iron bars with a guarantee of IDR 3.9 trillion. Now he has only been named a prisoner of the house.

This is the big event that rocked the crypto industry that occurred throughout 2022.