Which altcoin ran 2022?

Good morning! Welcome to The Daily Moon. Welcome to The Daily Moon. What a year, eh? Crazy. Everything happened and we’re finally putting it behind us. We don’t have a little tag for you here today. We’ll stick to thanking you for reading us and wish you well. For the next week, we’ll be bringing you trends and explainers that will help you understand crypto better, and then we’ll be back with more craziness in 2023. 

The markets were in the red. Bitcoin dipped below $16,800 and Ethereum slid to ~$1200. Nasdaq was down in early trade. Back home, Sensex and Nifty ended in the red too. 

Five Events That Shook Crypto

It was a year packed with action. From Terra's de-peg, tax woes, Merge, to the FTX collapse, there was a lot that happened. Let's get started.

Crypto Tax

India imposed a 30% tax on crypto profits from April 1. There is also a 1% tax at source on crypto transactions. But we still don't know whether crypto is legal in India. Similarly, Portugal proposed a 28% tax on crypto profits. In stark contrast, the UAE kept crypto income tax free for investors. But crypto businesses in the region may be taxed from 2023.

Terra De-peg

The one that started it all. Algo-based stablecoin Terra de-pegged from the US dollar in May. Its sister token Luna crashed soon after. This led to a ripple effect in the entire crypto ecosystem. Three Arrows Capital and Celsius filed for bankruptcy soon after. Terra was partly revived with a hard fork, but its founder Do Kwon is MIA. Possibly in Serbia, but who knows.

Ethereum's Merge

Ethereum turned green when it moved from proof-of-work to proof-of-stake in September under the Merge. Stakers gained, but miners went out of business. Some miners got together to launch an ETHPoW token, but it didn't really take off.

FTX bankruptcy

The biggest shocker of the year was FTX's insolvency. But more than the event itself, what rattled the market was Binance abandoning a last-minute buyout deal of the exchange. SBF filed for bankruptcy following the breakup. SBF's been arrested and is being extradited to the US as you read this.

CBDC

Despite the institutional adoption of crypto, central banks aren't thrilled about it. Governments want to launch "approved" tokens. Some of them, including India and China, have begun pilots for Central Bank Digital Currency. 

There were also a few anxious moments, such as the SEC's rejection of Grayscale's Bitcoin ETF and New York's PoW ban. We hope that 2023 is calm.

Three Altcoins That Ruled 2022

We know that 2022 wasn’t everyone’s favourite. Bitcoin and Ethereum fell ~70%. But there are a few altcoins that bucked the trend. Here's a list:

Lido's Staked ETH

Lido's Staked Ethereum, a derivative of ETH, took the top spot among DeFi tokens. Its market cap shrunk by just ~3% this year. The Merge euphoria in August and September may have played a part because users staked their ETH before the switch.

Trust Wallet Token

The governance token rose nearly 117%. Trust Wallet is a self-custody crypto wallet app to store digital assets. FTX collapse brought more users to Trust Wallet because it was considered a secure way to store crypto.

FYI Self custody means you own the tokens instead of wallet providers owning the private keys.

GMX

The governance token of the decentralised exchange GMX is down ~23% from its all-time high in January and up over 100% compared to the start of the year. It has also launched on the Avalanche blockchain, so the token's accessibility has improved. 

Working Towards Crypto TRUST

US Republican Senator Pat Toomey is all set to retire but in his last few weeks in office, he’s introduced a new bill that he hopes will drive “sensible regulation of cryptocurrencies”. 

The TRUST Act

It’s called the Stablecoin Transparency of Reserves and Uniform Safe Transactions (TRUST) Act. And it’s the latest in the Senator’s attempt to regulate the crypto industry. The bill has some pretty interesting components:

• Stablecoins will not be considered securities.

• A new federal category licence will be created for stablecoin issuers.

There’s a catch

Toomey will retire, so there is some scepticism on whether this bill will be taken seriously. There is also the Stablecoin Transparency Act, proposed in March. That one considers stablecoins as securities. Either way, the US seems to be headed towards regulation rather than banning. That’s always a good thing. 

Living On Bitcoin

It’s all the rage. Snowden wanted it, European MPs are doing it, and now a Bitcoin advocate has taken their entire salary in BTC. 

In a Twitter thread, he wrote what worked, and what didn’t. 

The TL;DR: 

• Buying increases during price drops, spending becomes more responsible. 

• Savings increase.

• Accounting is a nightmare.

• Tax reporting is challenging. 

All things considered, SVN is quite pleased. So much so, he’s considering continuing for another year of Bitcoin-only salary. Keep going, SVN. Godspeed!

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