The year 2022 was terrible year for crypto, as more than $2 trillion in largely speculative market value evaporated, the World Economic Forum has said. The WEF is an international non-governmental and lobbying organisation.
WEF said in a blog post that millions of consumers and businesses lost money. But perhaps more damaging for the nascent industry and technology was the erosion of fundamental trust in the promise of crypto-finance, which was supposed to be a correction to many of the misdeeds that gave rise to the 2008 financial crisis. This trust was now waning, it said.
“Meanwhile, policymakers who have been sounding an alarm about cryptos’ excessive risks, while failing to create sensible regulations, have been vindicated by not one, but multiple large-scale failures,” wrote Dante Disparte, chief strategy officer and head, global policy, circle internet financial, in his blog post on January 3, 2023, which was shared by WEF.
The blog said that dot-com bubble burst in the early 2000s led to the future of the World Wide Web and Internet to land into the hands of more durable companies. Likewise, perhaps 2022 will mark a handover of crypto technology and Blockchain infrastructure to steadier hands now.
“While the underlying technology of cryptography and Blockchain is generalisation to all industries and coordinating activities (collectively the building blocks of Web 3.0), experimentation at the core of financial services, among other sectors, continues unabated.
Indeed, as a test of the staying power of digital assets and Blockchains at the core of financial services (and other areas of the global economy), watch what the big banks and mature financial services firms do, not what they say,” Disparte wrote in the blog.
“Herein lies the regulatory and policy conundrum with the epic crypto failures in 2022. The countries that enable responsible competition will shape the future. Cryptography and Blockchains will continue to be integral parts of the modern economic toolkit, despite the great harm these tools may have caused when wielded by the wrong people,” the blog further said.
Incidentally, after dealing a significant financial blow in 2022, the crypto industry hopes for a strong rebound this year, as new regulations come into force, making the cryptocurrency space more secure.
In addition, India, which took over the G20 presidency, has announced collaborations and synergies among nations to develop international crypto laws and frameworks.
Non-fungible tokens, or NFTs, were all the rage in 2021, soaring to astronomical heights along with skyrocketing cryptocurrency prices.
However, cryptocurrency prices fell off a cliff in 2022, throwing cold water on the NFT market. Prices have fluctuated dramatically since then, and trading volumes have been far below those seen in 2021.
