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In January 2023, ViaBTC Capital and CoinEx jointly released the Crypto 2022 Annual Report to offer data analysis and insights on nine sectors, including Bitcoin, Ethereum, stablecoins, NFTs, public chains, DeFi, SocialFi, GameFi, and regulatory policies. This report also predicts the crypto trend in 2023.

According to the report, affected by factors such as the macro environment and the bullish-bearish transition, the entire cryptocurrency industry turned bearish in 2022. In particular, following the collapse of Terra in May, most cryptocurrency sectors were hit by the bearish impact. Below is an overview of each segment.

1.Bitcoin

In 2022, Bitcoin’s overall performance remained sluggish, with significant drops in price and trading volume compared to 2021. The price at the end of 2022 even fell below the peak of the last bull market. Bitcoin’s price trend throughout the year is obviously influenced by the pace of US interest rate hikes, but as US interest rate hike policy continues to progress, its impact on the bitcoin price gradually decreases. Re BTC mining, the difficulty of the network remained at an all-time high. Meanwhile, mining revenues plummeted and miners had to discontinue their old models. Affected by multiple factors, the mining industry has experienced a strong crowding-out effect, which has driven small-scale mining owners out of the market for various reasons. At the same time, long-established mining pools and mining farms have managed to maintain a certain level of stability.

2.Ethereum

Ethereum primary stats have been on a downward trend in 2022. Besides secondary market price and trading volume, on-chain data including TVL, trading cost, active address and trading volume engraving also fell. Despite this, the network has made a lot of progress in 2022. On September 15, Ethereum completed the historic transition from PoW to PoS. The merger significantly reduced the energy consumption and daily generation of the network, thereby reducing the dumping pressure from secondary markets. Meanwhile, Layer 2 projects such as Arbitrum, Optimism, zkSync, and Starknet have launched their mainnet in whole or in part. Although their daily transaction volume is much lower than that of the Ethereum mainnet, the projects have surpassed Ethereum in terms of number of addresses. Additionally, their gas charges were typically 1/40 of those charged by Ethereum. At the same time, the network has also seen an exponential increase in gas prices in 2022.

3. Stablecoins

The stablecoin market as a whole was stable in 2022. Specifically, throughout the year, the supply of stablecoins fell from $157 billion to $148 billion, a decline of 6%. In this regard, the decline has not been substantial. When it comes to centralized stablecoins, USDT maintained its dominance, while the BUSD is rising rapidly on the back of Binance. In contrast, algorithmic stablecoins were hit hard by the fall of LUNA, which shattered trust in decentralized stablecoins and reduced trading volumes. As a result, there has been a sharp drop in the number of new decentralized stablecoins.

4. Public Channels

Despite the difficult market conditions in 2022, public broadcasters remained a competitive sector. Due to the overflow of demand caused by congestion in the Ethereum network, the new low-cost public channel maintained a good performance before May. However, as various bad news brewed and fermented, a series of bankruptcies occurred one after another. Many public chains were heavily impacted, and the decline was even worse than Ethereum’s. In May, Terra collapsed in just a few days, making it the first well-known public channel to fall. Additionally, Terra’s collapse was also a signal that the market has turned totally bearish. In November, hit by the fall of FTX and Alameda Research, the token price of Solana and TVL plunged again, and projects in its ecosystem were also affected. Other new channels such as Fantom and Avalanche were also struggling. At the same time, a number of new public chains, including layer 2 projects like Arbitrum and Optimism and meta-related chains like Aptos and Sui, debuted in 2022.

5. NFTs

Last year, the NFT sector declined after its initial boom. In April, NFT’s market capitalization reached $4.15 billion, an all-time high; In May, driven by the boom of Otherside, an NFT metaverse collection developed by Yuga Labs, the industry’s trading volume hit a record $3.668 billion. But soon after, as the NFT market became sluggish, the trading volume declined. Meanwhile, the price of blue chip NFTs, as well as the ETH price, fell, which had a negative effect on the market. In contrast, the number of NFT holders has steadily grown and reached an all-time high in December.

6. DeFi

DeFi’s TVL also trended lower in 2022. In particular, when LUNA/UST crashed in May, mainstream coins witnessed the most dramatic crash in cryptocurrency history. , which was followed by a collapse of the TVL. Moreover, during the year, DeFi also experienced frequent hacks, which raised security concerns for DeFi. In terms of innovation, although the first two quarters of 2022 have seen DeFi 2.0 hot trends from time to time, as well as the collapse of OHM and the meme (3, 3), DeFi 2.0 has almost turned out to be a completely false narrative, and the market shifted its focus to DeFi 1.0 infrastructure projects such as Uniswap, Aave, and MakerDAO. Despite the bearish conditions, traditional DeFi projects including AAVE and Compound managed to maintain stable operations and attracted many new users from some CeFi projects (e.g. Celsius and FTX).

7.SocialFi

In 2022, the blockchain industry continued to explore new possibilities for SocialFi. Over the year, we have seen iconic terms like Fan Token, Soulbound Token (SBT), Web3 Social and Decentralized Identity (DID) appear, but PMF (Product-Market Fit) has never been identified. Despite this, the SocialFi still managed to present us with a number of flagship projects, including the Web3 lifestyle app STEPN with SocialFi elements, the Galxe credential network, BNB SPACE ID chain-chain domain name service, Lens Protocol social graph, and Web3 Hooked Protocol gamified social learning platform. Apart from this, the Qatar World Cup 2022 has also helped Fan Tokens gain wide market attention. As a result, instead of falling due to the bearish impact, Fan Tokens also performed slightly better in 2022 than in 2021.

8. GameFi

2022 was also the start of the GameFi bear. There has been no significant innovation in the P2E blockchain gaming model. As user growth and trading volumes waned, institutional investors turned away from the P2E model. During the first half of the year, the Move-2-Earn model created by STEPN attracted attention with its innovative dual approach of tokenomics and marketing, bringing a new dynamic to GameFi. Last year, blockchain projects raised the largest funds in April, with blockchain investments totaling $6.62 billion. However, the market did not respond to other project teams focusing on the reality-plus-token model. As the multi-chain ecosystem grew in popularity, Ethereum maintained its dominance in the GameFi ecosystem, but the growth rate of projects on Ethereum did not match that of BNB Chain and Polygon. Additionally, most channels relied heavily on their best projects, and there were still plenty of low-quality GameFi projects with a small user base, below-average interactions, and low transaction volumes.

9. Regulatory policies

Generally speaking, for the cryptocurrency industry, 2022 has been full of ups and downs, but regulation is moving in the right direction. Over the past year, regulators in the developed world have made a lot of progress. The United States has published a regulatory framework for cryptocurrencies; the European Union initially approved the MiCA law and the TFR law; the United Kingdom and South Korea have made progress in setting up the organizations concerned; Russia and Hong Kong have encouraged discussion and implementation of cryptocurrency mining policies and virtual asset securities. The turmoil that occurred in the cryptocurrency industry in 2022 was partly the result of the sharp decline in funds and partly the result of regulatory loopholes and crackdowns. Last year, the failure of Terra and FTX, two major cryptocurrency projects, prompted national regulators and law enforcement to further strengthen their oversight and investigations of cryptocurrencies.

For more details, please visit the ViaBTC Capital website via the link:

https://capital.viabtc.com/blog/ViaBTC-Capital:-2022-Review-and-2023-Forecast-in-Crypto-Industry-193?category=0&lang=en_US


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