To put it bluntly, 2022 was not a good year for the cryptocurrency industry. Billions upon billions of dollars disappeared from the market. And every few months, high-profile meltdowns triggered disastrous implosions for companies across all corners of the blockchain tech sector. We’re (hopefully) in the aftermath of the destruction and looking toward the future. With that said, we must ask one question: are we witnessing the death of crypto? Or is this a painful period of reconstruction and rebirth for the industry?
Is this the death of crypto?
Although we’re (again, hopefully) past the industry-shaking quakes of Sam Bankman-Fried and Do Kwon, we’re still reeling from the shockwaves. For example, Forbes reports Binance lost $12 billion since the collapse of FTX, nearly 25% of its total assets.
And they’re under federal investigation after the public role company CEO Changpeng “CZ” Zhao played in FTX’s collapse. CZ has repeatedly proclaimed Binance is a stalwart of good crypto business practices. So the recent greenlight to buy Voyager Digital’s assets should be a helpful shot in the arm for Binance’s portfolio.
Elsewhere in the crypto world, CNBC reports that Coinbase recently announced a massive round of layoffs of nearly 20% of its workforce. The company had already cut about 1,100 jobs in June last year during crypto winter.
Or is it a rebirth?
Like the dot-com boom in the late ’90s, the technology behind crypto is innovative, practical, and highly misunderstood. Blockchain tech has tons of uses well beyond decentralized finance. The latest crash could pave the way for further innovation, just like the dot-com bubble in the early 2000s.
Blockchain tech provides a method of securely storing and securely sending data anywhere in the world. And, perhaps most importantly, it ensures no single entity has complete control over said data (the decentralized part of DeFi). So, even if the recent turmoil sends crypto the way of the dinosaur, it isn’t the end of blockchain technology.
What does the industry need to survive?
Several cryptocurrency executives, including CZ and Coinbase CEO Brian Armstrong, have repeatedly called for clearer crypto regulations. The Securities Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have both vied for the right to regulate crypto. SEC chair Gary Gensler has repeatedly stated that most crypto, except for Bitcoin, falls under securities law.
