After an extraordinary 2021 for Bitcoin, and the cryptocurrency industry as a whole, 2022 will have been an important reminder to all those who thought Bitcoin was engaged in a supercycle. The 4-year cycles that Bitcoin’s price had been following since its inception, therefore, seem more valid than ever.

Of course, this will have to be confirmed in 2024 when Bitcoin’s next Halving will occur. But we are not there yet.

For all those who entered the Bitcoin world in 2020 or 2021 and are still here today, I want to congratulate them first of all. Congratulations to you! You’ve just been through some tough times. Not everything is easy with a currency revolution like Bitcoin, and that’s why this revolution is so valuable.

Things are always difficult, but rest assured that Bitcoin’s long-term goals are still relevant. As I often tell you, as long as the Bitcoin protocol gives you the same guarantees, everything will be fine. And it is.

If 2022 was chaotic for the price of Bitcoin, it was also chaotic for the entire cryptocurrency market, but also the traditional financial system.

With the COVID-19 pandemic, companies found themselves boosted by favorable government policies. To this end, they have received many tax and rate benefits that have boosted their performance.

However, all good things must come to an end, as the saying goes. This honeymoon could not last forever. Thus, regulators began to economize on the oxygen given to companies. As a result, businesses’ performance began to falter.

To be precise, when interest rates are higher, the cost of borrowing appreciates at the expense of investments. The result is a decline in demand and liquidity in the economy. It didn’t take long for the Nasdaq to pale in comparison. The price of Bitcoin, which remains strongly correlated to it, has also suffered.

A promising start to 2022 before the flops followed

There was no sign of the storms to come at the beginning of 2022. The year 2021, with the pandemic, had inflated the price of blockchain Bitcoin, reaching $68K by the end of November 2021.

At the beginning of 2022, the price of Bitcoin was still over $46K. And then, as events unfolded, its price dropped to around $16.5K by the end of 2022:

This represents a 65% drop in the value of the Bitcoin price over the year 2022 with a market cap of around $320B.

Certainly, investors were increasingly concerned about the uncertainty of the global economy with the war between Ukraine and Russia unleashed in February 2022 by Vladimir Putin. The specter of recession loomed over the world, making investors increasingly reluctant to take risks.

Central banks’ announcements of interest rate hikes to curb inflation were also driving the volatility of the Bitcoin price. Nevertheless, the king of digital currency had managed to hold above $35K despite the hyper volatility inherent in crypto-currencies.

However, these conditions were nothing like what the market experienced from May 2022. In this case, earthquake-like circumstances plunged the market into a real cataclysm. These impromptu events are in fact bombs that have exposed one after another, making 2022 a real black series.

Terra Luna opens the dance in May 2022

The collapse of Terra Luna, a specialist in the algorithmic stablecoin, was the first trigger. The massive sale of UST, which together with Luna formed the cornerstone of the Blockchain, caused Terra’s loss. The mechanism involves the docking of UST by an algorithm to the dollar and Luna whose role is to preserve the UST’s anchor.

According to Chainalysis, the liquidation of these USTs originated with two traders who took advantage of a move by TerraForm Labs in the liquidity pool to successively exchange quantities of USTs for USDC.

Do Kwon’s deception then came to light, causing the price of Bitcoin to plunge below $30K.

3AC, Celsius Network, and Voyager Digital follow in June and July 2022

Three Arrow Capital (3AC), a crypto hedge fund, was a big deal with its 10 billion in assets under management. That was before it defaulted on several loans from institutions including Celsius Network and Voyager Digital. The hedge fund is one of the collateral damage of Terra.

Indeed, before the fall of Luna, it had switched with BTC against LUNC for about $500 million from LUNC with the Luna Foundation Guard (LFG). Since then, 3AC in liquidation has also dragged in its wake Celsius Network, which went bankrupt, and Voyager Digital, whose assets Binance has bought.

As far as Celsius Network is concerned, Alex Mashinsky’s deception also came to light during this period. The price of Bitcoin is now falling below $20K.

FTX delivers the year-end uppercut in November 2022

Just when it seemed that Bitcoin was on the verge of a comeback above $21K in early November 2022, FTX, the world’s second-largest exchange at the time, turned out to be a giant with feet of clay.

It was the revelations of FTX’s insolvency risk by Coindesk that set the powder keg alight.

Specifically, Alameda Research, FTX’s sister company, mainly owned FTT tokens, native to the FTX exchange. The rest is worthy of a TV show. Binance, which had agreed to support FTX, withdrew its support. At the same time, money evaporated from the exchange.

Finally, Sam Bankman-Fried aka SBF was indicted on eight counts, including fraud, conspiracy, and money laundering. The extent of the FTX contagion is not yet known. For example, crypto lender BlockFi filed for bankruptcy at the end of November 2022, leaving its customers in deep trouble. One wonders how many others will follow.

The price of Bitcoin has since been between $16K and $17K.

Binance adds fuel to the fire in December 2022

These chain failures have been accompanied by massive withdrawals from exchanges over the last few months. The most notable of these are the ones that took place on Binance. About 3 billion dollars were lost on the platform in December 2022 as rumors of an FTX-like scenario surfaced.

All of this is a sign of progressively eroding investor confidence as they are driven by the economy to find places they feel are safer for their assets.

Important lessons to learn for the future

The year 2022 has brought to light a reality that Bitcoiners, including myself, have been constantly reminding us of: you only own the Bitcoin whose private keys you have in your possession. Bitcoin which is on an exchange platform is at the mercy of the managers of that platform.

SBF has admitted to selling fake Bitcoin to FTX customers. So, it is in your best interest to apply the motto “Not your Keys, Not your Bitcoin” and remove your Bitcoin from the exchanges.

You never know what tomorrow will bring. You may trust your exchange today but abused FTX customers were saying the same thing in October 2022. You see the result.

Beyond the importance of actually securing your money yourself, which is the deeper meaning of the Bitcoin revolution, this year of 2022 will have brought back into focus the importance of patience with the Bitcoin revolution.

After the euphoria of 2021, you can now see that even if you have understood the why of Bitcoin, a majority of people still haven’t. So you need to be patient and try to help more people understand why the future belongs to a decentralized digital currency that does not depend on the control of central bankers and governments.

It’s about self-sovereignty. This theme will continue to be in the spotlight in 2023 in my opinion.

While there have been many negative events this year in the Bitcoin and cryptocurrency world, I would like to note again the consistency of Michael J. Saylor who is continuing to implement a DCA strategy with MicroStrategy. As of the end of 2022, MicroStrategy has added 2,501 BTC to what the company holds.

The company founded by Michael J. Saylor now holds 132,500 BTC. The fact that Michael J. Saylor continues to accumulate Bitcoin when he is -45% down on what he currently holds is a reminder of another essential truth: once you understand the why of Bitcoin, nothing will stop you. You will continue to accumulate Bitcoin to protect the fruits of your labor in a future world more uncertain than ever.

A lesson I often remind you of with my phrase “Stay strong, Stay Bitcoin HODLers.”

For this last article of the year, I would like to wish you all a happy end of 2022 and a good start to 2023. See you soon for more adventures in the world of Bitcoin.