RekTimes Weekly Markets
Writer: Zacharias
9 July 2022: The second quarter of 2022 was extremely eventful as the cryptoeconomy moved further into its market contract & recession. The market was led by a near 60% contraction in Bitcoin, coinciding with the collapse of much of the market.
The news wasn’t all bad however. Bear markets are notorious for being times of massive opportunity. This includes the opportunity for traders, investors, and users to stack assets & dollar cost average (DCA). It also pertains to developers & projects having the opportunity to quietly build & reinvigorate their protocols.
Q2 Takeaway: Those who outlast this market contraction are poised to be on top of the next bull run
The Worst of Q2 2022
It has been a busy quarter for the cryptoeconomy. The following represents a brief summary of Q2 2022 in the cryptoeconomy:
Inflation Soars
Much of the second quarter of 2022 was dominated by news of rampant inflation, soaring costs, and more. This has led to many companies reacting to a looming global economic recession as individuals struggle to find disposable income & instead rely on debt to service high costs.
In the US, Americans saw their inflation rate spike to a multi-decade high of 8.6% YoY and it has only recently begun slowing down. With energy prices and food prices reaching astronomical prices, it squeezed the average American consumer into taking on even more debt.
Many parts of the US have been plagued with unaffordable housing, with rents in some American cities increasing over 50% YoY. This prompted the US Federal Reserve to aggressively raise rates.
Russo-Ukrainian War
Russia’s invasion of Ukraine kicked off major fears amongst global parties — a conflict that still rages on to date. While estimates are impossible, analysts suggest tens of thousands of people may have now perished on both sides while a solution still appears out of sight.
Evacuations of Ukrainian citizens continues as refugees flee areas like the Kerson region. The US continues to peddle billions in aid & arms into Ukraine as Ukraine President Zelensky has remained confident it will not cede any land peacefully to Russia.
Terra Luna Collapses
The major catalyst for a storm in crypto came from the wildly popular Terra Luna. The Terra-led algorithmic stablecoin UST depegged during market volatility around May 9, 2022. Prior to the depegging event, UST was an $18 billion protocol.
When the depeg occurred, it created a death spiral that sent the LUNA token to zero as the supply expanded into the trillions. The loss of Terra Luna sparked a series of eventual bankruptcies and liquidations as thousands of crypto participants lost everything in the initial crash.
CeFi Bankruptcy Wave
A combination of many different factors led to massive declines in crypto assets across the board. With companies taking a risk-off approach and Terra Luna going from a $40 billion protocol to almost zero, many lenders & CeFi companies felt the pain hard.
The following is just a short list of the entities that struggled with layoffs or bankruptcy
- Three Arrows Capital (insolvent)
- BlockFi (bailed out)
- Voyager (bankrupt)
- Celsius (restructuring)
- Coinbase (layoffs)
- Gemini (layoffs)
- Crypto.com (layoffs)
The Best of Q2 2022
On the other side of that coin, there was tons of positive news throughout the quarter as well. The following list represents just a few highlighted innovations, breakthroughs, and other positive news for the space in Q2:
World’s First Decentralized Perpetual Note
Ampleforth announced that it was releasing the world’s first ever decentralized perpetual note (SPOT) — an asset similar to a stablecoin that is backed by AMPL derivatives, giving it significant price stability without needing a rebasing mechanism.
The Ampleforth SPOT token will be slowly integrated into the cryptoeconomy sometime in 2022 as the smart contracts for SPOT get finished. SPOT has multi-billion dollar potential as it could provide significant on-chain collateral with minimal risks. This is essential for on-chain stablecoins, DeFi protocols, and morel.
Solana Mobile Stack
Solana announced what could be a massive pivot for the network — the release of the Solana Mobile Stack (SMS). This comes with the ability to purchase what is being called a web3 mobile device by Solana.
The Graph Pushes Towards Decentralization
The Graph is planning to sunset its hosting service by Q1 2023, taking a massive step forward in decentralization of the single most important querying protocol within the space. Sunsetting in this case means that The Graph is moving those responsibilities out of its hands and to those who secure the network.
World Adoption Continues
USDC stablecoin producer Circle launched a Euro-backed stablecoin for the European Union called the EuroCoin. While each region of the world has been different (China has an outright ban, Europe is undecided), blockchain-based technologies continue to spread.
The space is famously following a similar adoption trend to the internet in the late 90s — something everyone expects to continue into the future. This bodes well for DeFi, GameFi, and other sectors as many projects surviving are at 90%+ discounts.
RekTimes in Q3
RekTimes has quietly been building in the background and can finally share some exciting news with our followers:
Website Coming Soon
In Q2, we officially purchased and began building out our own home at rektimes.com!
That website will become the official publication home of RekTimes where readers will be able to receive more in-depth trading analysis, research reports, and our usual lineup of content. We will have a membership system that will offer more exclusive, higher-level content.
The good news for all our readers — if you are subscribed to us on Publish0x or Medium before we officially launch our website, we want to give you a free premium membership for life. We wouldn’t be having the success we are without you and want to pay that back to our supporters.
There will be an announcement sent out soon as to how to claim that membership. Stay tuned!
Team Expansion
In addition to the website, we have also expanded the RekTimes team this past quarter with the additions of two analysts, Nick & John! Keep an eye out for their articles to pop up from time to time.
If you are interested in writing for RekTimes, send an email to [email protected]!
Partnerships
RekTimes now has partnerships with two different entities: Moose & Marsha Home Goods & Crypto EQ. We thank them for their support!
Q3 Content Plan
As we continue to work in the background in our website buildout and some other plans, our content posting schedule will remain slower — at least for now.
Our newsletter will be wrapping up its first volume in just five more issues! Those issues will be released on the following dates:
- July 16
- August 6
- August 13
- August 20
- August 27
In addition to the newsletter, we are starting a learning campaign / resource guide of similar stature to Binance Academy. We will be focusing on the cryptoeconomy — what it is, what parts there are, etc.
Our first two research reports will also be finished sometime in Q3 and will be first released by the end of the year on the website itself for our premium members.
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