Regardless of the somewhat hostile environment, crypto adoption is still rising, signaling that the bear times will end. According to recent research, about 20% of people in America who have never owned crypto plan to invest by the end of the year. But why is the space crashing when interest is on the rise? The underlying processes that determine how a market performs are numerous and often interconnected, leaving analysts with the tough task of untangling what went wrong. However, 2022 proved to be one of the most challenging years in the crypto industry to date. Starting with the Terra LUNA fiasco at the beginning of the year, the fate of stablecoins was first put to the test. What is more, in the following months, we saw big companies and venture capital firms collapse. Wallet provider Celsius filed for bankruptcy, locking away customer assets, while the Three Arrows Capital hedge fund also defaulted, with its founders going into hiding. More recently, we’ve seen the FTX centralized exchange crumble to pieces as it was revealed that the exchange misappropriated customer funds for years, and hackers managed to drain its wallets, leaving thousands of users with empty portfolios. The combination of these significant events and the added global economic pressure has left the crypto space in a twist.
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