Here is what happened in the Cryptoworld in the first quarter of this year:
Total crypto market capitalization in Q1
- This year started with bitcoin (BTC) rallying above the USD 29,000 level for the first time, pushing its market capitalization to above USD 0.5trn. Over the first week of January, bitcoin continued its upward trend with more momentum, jumping over USD 41,000.
- Following the footsteps of bitcoin, ethereum (ETH), which had recorded an all-time high of around USD 1,400 back in January 2018, was also rallying but failed to impress Chinese crypto users, who were favoring BTC.
- Notably, bitcoin and ethereum total value locked (TVL) in decentralized finance (DeFi) saw a plunge of 50% and 30%, respectively, with the number of coins staked in the Ethereum 2.0 increasing. Meanwhile, Ethereum fans started ‘bragging’ about rising fees.
- Later in the month, ethereum managed to reach its ATH territory in USD. Meanwhile, some mining pools banded together to try and stop the much-anticipated Ethereum Improvement Proposal (EIP) 1559.
- Blockchain analysis firm Chainalysis said ETH reached ATH because of demand to use it as collateral in DeFi, while BTC was rallying because of demand from new, large investors.
- The most popular joke coin Dogecoin (DOGE) also soared 270% in January, reaching the USD 0.07 level and entering the top 10 for the first time.
- More bad news for XRP was compiling as major exchanges were delisting the coin, though the crypto market resumed its trend, proving that it has matured. Further, despite fintech company Ripple confirming a failed settlement with the US Securities and Exchange Commission (SEC), XRP rallied.
- Crypto platform Bakkt unveiled its plans to onboard nearly 20m users by 2022 and claimed their post-merger enterprise value might reach USD 2.1bn, adding that the crypto market would grow to the USD 3tn mark by 2025. (Spoiler: this milestone was achieved by November 2021).
- Investment company Ruffer poured GBP 550m (USD 748m) into bitcoin, and justified its move by saying that BTC “is a unique beast as an emerging store of value, blending some of the benefits of technology and gold.”
- American financial advisors revealed that they aimed to increase their crypto holdings.
- Russia’s Central Bank announced new banking regulations, enabling financial institutions to freeze or block crypto-related bank accounts.
- In Hong Kong, regulators gave a green light for the first Bitcoin exchange-traded fund (ETF).
- US Treasury Secretary nominee Janet Yellen hinted at a new crypto environment saying that cryptocurrencies were a concern when it comes to terrorist financing. She also suggested the idea of taxing unrealized gains, while stating that crypto had some benefits.
- The Bank for International Settlements (BIS) announced that it would work on a new blockchain-powered tokenization incentive, while the UAE financial watchdog said it was set to regulate crypto by 2022.
- The Central Bank of Bahrain issued a license to a new crypto exchange to offer Sharia-compliant crypto services.
- In Davos, banks were warned that they risked falling behind digital finance networks and providers.
- By late January, the WallStreetBets saga was intensifying, pushing the price of GME, the stock of videogame retailer GameStop, to record highs. At this time, the crypto market got a new entrant, a ‘wrapped’ GameStop token.
- By early February, Elon Musk said BTC was on the verge of getting broad acceptance by the “conventional finance people”. However, back then, he had no “strong opinions on other cryptocurrencies.” Hinting at DOGE whales, Musk said there was too much concentration in the meme coin, stating: “I will literally pay actual $ if they just void their accounts.”
- Likewise, the Dallas Mavericks owner Mark Cuban said that “blockchain-driven assets legitimately became stores of value.
- Meanwhile, two prominent economists warned that central bank digital currencies (CBDCs) could ‘flop’ if they weren’t designed as stores of value.
- The central Bank of Japan announced that it aimed to launch a pilot for a digital yen in the following spring.
- In Colombia, banks started to work with some of the nation’s biggest crypto exchanges on a year-long crypto transactions pilot.
- Ukraine revealed that it aimed to bolster its budget with nuclear-powered crypto mining.
- The payments giant Visa partnered with neobank First Boulevard to pilot its crypto APIs offerings, which involved “digital assets” held by the American crypto custody firm Anchorage.
- Following Visa’s footsteps, payments giant Mastercard announced that it would start supporting “select cryptocurrencies directly on our network” – but at least in the initial stage, it was about stablecoins, which are not cryptocurrencies.
- Major crypto exchange Binance quietly launched the Beta version of Binance Pay, while Gemini announced a new product, Gemini Earn, which offered customers rates of up to 7.4% APY on their crypto deposits.
- The US-based business software firm MicroStrategy hosted over 1,400 firms at their Bitcoin for Corporations event, while major consultancy company Deloitte released a guide for corporations looking to invest in BTC.
- Then MicroStrategy raised over USD 1bn to purchase additional bitcoin. Similarly, major asset manager BlackRock started “to dabble a bit’’ in bitcoin.
- In mid-February, Tesla announced USD 1.5bn worth of BTC purchase, stating that it aimed “to begin accepting bitcoin as a form of payment for our products in the near future.” The news prompted a new BTC all-time high of USD 48,000.
- America’s biggest tech titan, Microsoft said it had no plans to follow in Tesla’s footsteps. Also, Bill Gates distanced himself from bitcoin buying, assuring that he had no intentions of acquiring crypto assets.
- The major derivatives exchange CME Group launched the trading of ethereum futures.
- America’s oldest bank, BNY Mellon, announced that it aimed to hold, transfer, and issue BTC and other unspecified crypto assets on behalf of its asset-management clients.
- US money-transfer giant MoneyGram claimed its support for Ripple was in place despite all the controversy surrounding the XRP-associated company.
- Deutsche Bank, Germany’s banking giant with assets of almost USD 1.8trn, took the plunge into crypto custody.
- Also, German-listed cannabis company SynBiotic announced that it “started to shift some of its free liquidity into bitcoin.”
- Major consulting company PwC researchers found several Mexican companies were developing an interest in delving into crypto.
- Chinese online sports lottery service provider 500.com acquired Bitcoin miner BTC.com.
- Nigerian Senators criticized the Central Bank of Nigeria’s clampdown on banks facilitating crypto investments, calling for a reversal of the ban.
- As bitcoin was soaring over USD 50,000, American politicians engaged in high-stakes crypto pledge wars.
- South Korean Gyeonggi Province announced an “intense” crackdown on crypto-flavored MLMs.
- Major crypto exchange Bitfinex and Tether, the issuer of the most popular stablecoin, tether (USDT), reached a settlement of legal proceedings with the New York Attorney General’s Office (AOG), pledging to disclose how USDT were backed in more detail.
- New Zealand’s collapsed crypto exchange Cryptopia, which was hacked in January 2019 and lost an estimated USD 30m in crypto assets, was once again hacked for some USD 45,000 worth of digital assets.
- Meanwhile, Craig Wright sent his lawyers against Bitcoin developers, and bitcoiners decided to strike back.
- The cryptoverse started March with Cardano (ADA)’s Mary update going live, bringing native tokens, decentralized finance (DeFi), and non-fungible tokens (NFTs) to the ADA network.
- Ecosystem of blockchain software products Enjin (ENJ) announced two scaling solutions meant to remove gas fees and bring support for NFTs from any blockchain.
- By early March, NFT overtook litecoin (LTC), bitcoin cash (BCH), and XRP among the searched terms on Google Trends, suggesting the start of the NFT mania. Soon ‘NFT’ surpassed ‘Ethereum’ on Google as well.
- It was also reported that swaps and NFTs were accelerating MetaMask’s growth. This was the time Jack Dorsey auctioned off its first-ever tweet as NFT, which fetched bids by Justin Sun and Sina Estavi. And artist Beeple’s USD 69m NFT entered art history.
- As Ethereum’s Vitalik Buterin and Coinbase’s Brian Armstrong weighed in on NFTs, sharing their thoughts on how to improve this emerging industry, Tron (TRX)’s Justin Sun managed to win a bid for a Beeple artwork. Sun had previously lost a chance to win Beeple’s ‘Everyday: The First 5000 Days’ NFT.
- Auction house Sotheby’s followed Christie’s with an NFT collaboration with popular artist Pak.
- Meanwhile, the award-winning Canadian musician Grimes and the celebrity socialite and singer Paris Hilton went full NFT.
- And while we saw attacks on personal tokens and NFTs, the USA’s Saturday Night Live attempted to explain “what the hell is an NFT?”
- MicroStrategy continued its foray into bitcoin, using dips to buy BTC 328 and BTC 205, respectively, while Hong Kong-based app maker Meitu made a USD 40m investment in BTC and ETH.
- The American asset management firm BlackRock said gold was failing as a hedge against inflation. Meanwhile, US-based investment banking giant JPMorgan Chase revealed that it wanted to offer its clients access to the crypto market, major investment bank Morgan Stanley revealed that it aimed to offer three bitcoin funds to its rich clients, and major cryptoasset management firm Grayscale launched five new trusts, after which the native digital currency for the Livepeer Network, livepeer (LPT), skyrocketed.
- South Korean commercial banking giants Shinhan and LG CNS unveiled their joint pilot platform for CBDC.
- Binance was investigated by the US Commodity Futures Trading Commission over concerns that it allowed Americans to place wagers that violated US rules.
- The US SEC said Ripple attempted to “divert the court’s attention” with invalid fair notice defence claims.
- MoneyGram got slapped with a class-action lawsuit over the use of XRP tokens, which was viewed as an unregistered and unlawful security by the US SEC.
- After all the trouble, MoneyGram eventually ended its partnership with Ripple, in a move that pushed XRP higher.
- Ripple soon agreed to acquire 40% in Tranglo, an Asian cross-border payments specialist, and then its executives picked a fight with Bitcoin advocates, attacking the Bitcoin network’s often-maligned proof-of-work (PoW) consensus mechanism.
- Newer stablecoins like USD coin (USDC), binance USD (BUSD), and DAI continued to rise, eating USDT’s market share. By early March, tether’s supply dominance hit a record low.
- Tether’s independent accountant’s report claimed the company’s assets exceeded its consolidated liabilities as of February 28.
- Vitalik Buterin said Tether was Bitcoin’s ticking time bomb demon, referring to the lack of transparency around assets backing USDT tokens.
- As Ethereum’s long-awaited EIP-1559’s launch date was approaching, dissatisfied miners planned “a show of force” against the update, which provoked countermove by the Ethereum developers.
- Trading platform eToro reached the 20m users milestone by mid-March, and said it aimed to go public via a merger, while the European trading platform Bitpanda was valued at USD 1.2bn.
- Bitfinex announced the launch of Bitfinex Pay, and Coinbase announced its ‘business presence’ in India, saying that it would “benefit from its huge pool of world-class engineering talent.”
- Meanwhile, South Korea’s largest exchanges said sales and income figures were rising through the roof.
- BTC ATM operator CoinFlip added dogecoin to its network.
- Mitsubishi along with banking and telecom giants invested USD 62m in DeCurret, a Japanese crypto exchange.
- BNY Mellon invested in Fireblocks, a digital asset storage, transfer, and issuing platform.
- Tesla started accepting bitcoin payments and said it didn’t plan to convert it to fiat.
- In late March, PayPal announced the launch of a service that would allow its customers to pay with BTC, ETH, LTC, and BCH, while Visa partnered with Crypto.com to settle transactions in USDC on Ethereum.
- And this was the end of the first, eventful quarter of an equally eventful year. Just wait to be reminded what Q2 brought to the table.
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– 2022 Crypto Regulation Trends: Focus on DeFi, Stablecoins, NFTs, and More
– DeFi Trends in 2022: Growing Interest, Regulation & New Roles for DAOs, DEXes, NFTs, and Gaming
– Crypto Security in 2022: Prepare for More DeFi Hacks, Exchange Outages, and Noob Mistakes
– How Global Economy Might Affect Bitcoin, Ethereum, and Crypto in 2022
– Crypto Exchanges in 2022: More Services, More Compliance, and Competition
– Crypto Investment Trends in 2022: Brace for More Institutions and Meme Manias