The macroeconomic outlook for the cryptocurrency industry appears grim heading into the new year as the fallout from Bahamas-based cryptocurrency exchange and the trial of its founder Sam Bankman-Fried continue to cast shadows, and strengthen scrutiny on regulatory issues globally.

Despite obstacles ahead, the technology appears here to stay. Amid warnings of market volatility, many governments and regulators have signaled interest in blockchain technology, whether for use in central bank digital currencies (CBDCs) or carbon credit markets

Forkast recaps the events of 2022. 

February: ‘Crypto Bowl’

Riding on a high from 2021, the crypto industry had big plans for this year and major firms splashed millions on advertising. 

The Super Bowl in the U.S., watched by an estimated 200 million viewers on Feb. 14, saw crypto firms such as Coinbase, FTX, and eToro dominate advertisements. 

FTX’s commercial, which featured American sitcom legend Larry David, urged viewers not to “miss out” on the next big thing – crypto. 

March: Major crypto hack, U.S. Fed begins to raise interest rates

The U.S. Federal Reserve raised the benchmark federal funds rate by 25 basis points to a range of 0.25% to 0.50%, its first rate hike since 2018.

The Ronin network that supports the popular Axie Infinity blockchain gaming platform became the victim of one of the largest cryptocurrency hacks ever in March. Hackers breached the network and stole around US$625 million worth of Ethereum and the USDC stablecoin. 

U.S. officials said that a North Korean state-backed hacking collective, Lazarus Group, was involved in the theft. With the help of U.S. authorities and crypto security firms, over US$30 million of funds have been recovered. This was one of the first of several hacks in 2022.

May: Terra-LUNA crashes 

The Terra network and its founder Do Kwon began the year on a high note. Terra’s algorithmic stablecoin TerraUSD (UST) had a market cap as high as almost US$18.7 billion in April. That all fell apart within a few days in May.

UST’s U.S. dollar peg began to waver on May 9 and slid to US$0.479 on May 11. The price rebounded a day later before it plunged below US$0.10 on May 19.

June: Terra-LUNA contagion begins

On Jun. 12, U.S. cryptocurrency lender Celsius froze withdrawals, swaps, and transfers in response to “extreme market conditions” and later laid off 150 employees and attempted to restructure

On Jun. 27, another crypto lender U.S.-based Voyager issued a notice of default to hedge fund Three Arrows Capital (3AC) for failing to service a loan worth about US$665 million.

Singapore-based 3AC was next to fall. On Jun. 29, the firm was ordered liquidated by a British Virgin Islands court. Two days later, 3AC filed for bankruptcy under Chapter 15. 

July: More fallout from Terra-LUNA, NFTs begin to waver, ‘crypto winter’ sets in

On Jul. 5, Voyager and its affiliates filed for bankruptcy under Chapter 11. Celsius filed for bankruptcy under Chapter 11 on Jul. 13. 

FTX proposed acquiring the bankrupt Voyager on Jul. 28 but in a court filing, Voyager called FTX’s proposal a “low-ball bid dressed up as a white knight rescue.”

The non-fungible tokens (NFT) market also declined in tandem with crypto.  

Monthly NFT trading volumes fell from over US$4.9 billion in January to under US$1 billion in June, per NFT data aggregator CryptoSlam. In October, that figure dropped below half a million.

But as interest in new NFT collections waned, major brands such as Bored Ape Yacht Club, CryptoPunks and Axie Infinity solidified themselves as industry leaders, with each one surpassing US$2 billion in all-time sales volume this year.

By mid-summer, a “crypto winter” had set in, with prices of crypto assets extending declines.

Bitcoin dropped around 70% from its all-time high in November 2021 by July. Many so-called alt-coins declined more sharply than Bitcoin or went bust. As of the time of publication, at least 2,400 cryptocurrency projects with their own tokens have failed, according to Coinopsy that tracks dead coins and digital assets.

Crypto companies began to hunker down for the crypto winter and started to lay off staff. 

Over the summer, Coinbase announced a cut of about 1,100 employees, about 18% of its workforce. NFT marketplace OpenSea laid off about 20% of its staff, and crypto exchange lost a quarter of its workforce. announced that it let go of 260 employees in June, but that number reportedly grew in the following months.

September: Ethereum’s Merge 

Amid all the doom and gloom, the crypto industry had a bright spot in September with an update – The Merge – to the second largest cryptocurrency blockchain Ethereum. 

The upgrade went through its final stage in mid-September, making the network 99.99% more energy efficient by transitioning from the proof-of-work consensus mechanism to proof-of-stake.

October: A bountiful month for crypto hackers

October was the “biggest month in the biggest year ever” for crypto hackers, with over US$718 million stolen from decentralized finance sites across 11 different hacks, according to Chainalysis, a U.S.-based blockchain analysis company. 

Decentralized finance (DeFi) was a hot target for hackers, accounting for almost 99% of the total losses from exploits from July to September, according to a report by Singapore-based security services platform Immunefi. 

November: ‘White knight’ FTX falls from grace, sends shockwaves across industry

FTX and its 30-year-old founder Sam Bankman-Fried went from industry leaders to bankruptcy in a matter of days. 

The debacle began after Binance CEO Changpeng Zhao announced that his exchange would sell its holdings of the FTT token, the native currency of FTX. 

Zhao’s announcement followed reporting from CoinDesk on Nov. 2 that found Alameda Research, Bankman-Fried’s crypto trading company, held an outsized amount of FTT on its balance sheet.

Binance’s sell-off announcement of FTT jettisoned the price of the token and caused industry jitters. FTX users began to pull funds from the exchange and it soon became mired in a liquidity crunch. 

On Nov. 8, FTX announced it was freezing withdrawals. After a potential buy-out deal from Binance fell through, Bankman-Fried declared the bankruptcy of FTX and its affiliates and stepped down as CEO. 

FTX filed for bankruptcy on Nov. 11 along with over 100 affiliates.

The fallout of FTX has reverberated through the industry, with Bitcoin falling below US$16,000 for the first time since November 2020. The crash was worsened by how Bankman-Fried had bolstered his position as a major industry player over the past year, bidding and offering lines of credit to distressed assets from the Terra-LUNA collapse.  

Crypto lending platform BlockFi, which had taken a US$250 million loan from FTX, declared its bankruptcy on Nov. 28. 

Crypto lender Genesis has also paused some user withdrawals, a move that has hit their institutional creditors, such as the Winklevoss brothers’ Gemini and South Korea’s GOPAX exchanges. 

Chainalysis estimated that the FTX collapse caused US$9 billion in losses throughout the industry.