2022 Second Worst Year in Record for Bitcoin and the Extended Market – Stablecoins Best Performing Category

2022 was a good year for centralized, non-algorithmic stable-coins. USDT, USDC, and BUSD have all seen their market share increase substantially throughout the year.

Bitcoin ends 2022 down 65%, its second-worst yearly performance since 2011, only beaten by 2018’s -73%, a new Arcane Research report shows.

“In this year’s high inflation environment, physical gold (-1% YTD) has vastly outperformed bitcoin, the digital gold. BTC’s digital gold narrative was premature, but the narrative delivered during the inflation build up of 2021.” – Arcane Research

According to Arcane, the crypto winter of 2022 was fueled by tightening macro conditions and vastly exacerbated by crypto-specific leverage and awful risk management by core market participants. The researchers also identify a positive correlation between crypto and equities in 2022 though predicts this to disappear next year as trading volumes in crypto also drop.

A subset of cryptocurrencies however fared much better in 2022, and these are privacy coins which outperformed the rest of the market this year, seeing a year-to-date loss of 47%.

“The relative strength of privacy coins is likely caused by the sustained utility of Monero related to darknet transactions,” the research points out.

Still, another trend is exchange tokens outperforming BTC and ETH this year, including FTT.

“The exchange token performance is highly dependent on how BNB is labeled. When excluding BNB, we note that exchange tokens under-performed BTC and ETH.”

Last year’s alternative layer-1 craze and metaverse hype has seen a brutal collapse, and these sectors are the year’s worst performers.

Perhaps the biggest performing crypto category in 2022 were stablecoins. The total stable-coin market cap relative to BTC’s market cap rose from 15% to 41% in 2022.

2022 was a good year for centralized, non-algorithmic stable-coins. Tether, USDC, and BUSD have all seen their market share increase substantially throughout the year.

The stablecoin trio currently has a combined market cap representing 41% of BTC’s market cap, 28% of BTC and ETH’s combined market cap, and 17% of the total crypto market cap. Starting the year, the stablecoin market cap represented 15% of BTC’s market cap, 10% of BTC and ETH’s combined market cap, and 6% of the total crypto market cap, the research shows.

Finally, one undisputed winner in 2022 was Binance.

“No matter how you look at it in terms of trading activity, Binance is the crypto market. After lifting trading fees for its BTC spot pairs this summer, Binance completely overtook all market share in the spot market, currently representing 92% of the BTC spot market volume in the last seven days,” Arcane reported

Additionally, in 2022 Binance has:

  • Taken market share in the stablecoin market
  • Seen its token vastly outperforming BTC and ETH
  • Been a clear outlier in terms of employment, doubling its employee stack in a year when several competitors have laid off half its workforce or gone bankrupt

It will be interesting to see how the market works out in 2022, even though the guys over at Arcane have been making some predictions. They see Binance re-introducing BTC trading fees again, leading to a normalization of the market dominance.

They also foresee Bitcoin trading in a predominantly flat range this year, but close 2023 at a higher price than the yearly open.




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