- Bloomberg releases a summary of the crypto industry’s biggest moments in 2022.
- The video portrays how the dominoes began to collapse after the fall of the Terra project.
- The article highlights how exposure to Three Arrows Digital and FTX pushed many crypto firms out of business.
On Christmas morning, the official Twitter handle for Bloomberg Crypto tweeted a video outlining a breakdown of the crypto market’s biggest events in 2022. The post specifically highlighted how heavily the digital asset ecosystem is interconnected and concentrated that its biggest participants aren’t even fully aware.
The Bloomberg article linked alongside, begins the conversation with 2021’s dawn and optimistic crypto players. NFTs had just become a mainstream topic and people were arguing about BTC versus ETH metrics.
However, the honeymoon period soon faded away with bankrupt companies, collapsing market players, and fraudulent founders. Thus, began the “crypto winter.”
“Many companies invested in Terra,” starts the video. Firms including Hash, Jump, Pantera, and investment arms of Coinbase, Binance, and Galaxy Digital helped raise funds. However, after the LUNA holders collapse, CEO Michael Novogratz’s Galaxy Digital faced a $555 million quarterly loss in August, in addition to a $77 million loss later due to FTX’s downfall.
Binance, which invested $3 million into Terra, experienced growth of $1.6 billion in token value before LUNA collapsed leading to a heavy loss. Binance also lost money when hackers stole $600 million from Axie Infinity’s blockchain bridge platform, Ronin.
In November, the leading crypto exchange announced the sale of $529 million worth of FTT tokens after Sam Bankman-Fried’s trading firm Alameda Research’s balance sheets were reported to be compromised. As FTT’s value dropped, came about the decline of the FTX empire.
Meanwhile, crypto hedge fund Three Arrows Digital which entered liquidation in June, had its funds reprimanded by the Monetary Authority of Singapore on account of false information and exceeding asset allowances.
Crypto lender BlockFi announced bankruptcy after losing $80 million and $400 million due to exposure to Three Arrows Digital and FTX. Simultaneously, Voyager also lost $660 million dollars upon Three Arrow’s collapse in addition to a failed deal with FTX. Binance US has agreed to buy the company’s assets out of bankruptcy for $1 billion.
The FTX bankruptcy affected many other companies, driving both digital currency group Genesis and crypto lender Celsius to declare bankruptcy.
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