Key Takeaways
- Cryptocurrencies were crushed across the board, with all of the top 10 coins taking heavy hits.
- The worst performer was LUNA, which collapsed in May toward near-zero valuation.
- Solana lost 92% of its value this year, falling from the third-largest cryptocurrency to the sixteenth position.
- The three best-performing assets were BNB, XRP and Dogecoin, yet each still fell by more than 56%.
- Bitcoin declined by 64% and Ethereum by 67%.
2022 — what a year.
It would be fair to say that it was not a good year for the cryptocurrency markets. The world shifted into a new interest-rate paradigm, and markets realized just how much the crypto space had relied on excessive leverage made possible by cheap financing.
That era of easy credit ended, liquidity was abruptly withdrawn, and market prices collapsed. Add several scandals — FTX, LUNA and Celsius, to name a few — and the markets were in full-blown panic.
In this article we examine the top ten coins as they stood at the start of the year.
How distant 2022 now feels
Below is a historical snapshot from the beginning of the year, taken from CoinMarketCap.
Bitcoin was not far from a trillion-dollar market cap, trading around $50,000 and still leading the market. Ethereum was trading below $4,000, while Binance Coin (BNB) held third place.
Tether was the highest-ranking stablecoin at fourth, while Solana had climbed to fifth. Solana, associated with entrepreneur Sam Bankman-Fried’s ecosystem at the time, was promoted as an “ETH killer” and enjoyed substantial gains, surpassing $50 billion in market capitalization.
The other stablecoin, USD Coin (USDC), sat at seventh, while Dogecoin ranked tenth if stablecoins are excluded (twelfth overall). Terra’s LUNA was in ninth place — the token powering the rapidly growing Terra DeFi ecosystem.
Everything seemed fine: life was moving along, markets were upbeat. Yes, the market had pulled back somewhat since Bitcoin’s November all-time high of $68,739, but prices were still elevated and inflows were strong. Happy New Year and welcome to 2022.
A year later
A year on, the picture looks very different. I compiled the performance of the top 10 coins (excluding the two stablecoins) and show them in the chart below:
LUNA, of course, imploded. Solana was the next hardest hit, losing 92% of its value in 2022 and dropping from one of the top-ranked tokens to sixteenth place. Avalanche also devastated investors, falling from eleventh to eighteenth and losing around 87% of its value in the process.
The relative outperformers were BNB, XRP and Dogecoin — but “outperform” is relative: each fell roughly 56–57%. Despite recent controversies surrounding Binance, BNB appears to have ended the year as the fifth-largest cryptocurrency, with USDC and USDT ranking ahead.
This year, only stablecoins showed real price resilience. Even the market leaders were hit hard: Bitcoin fell about 64% and Ethereum about 67%. These declines would look even larger if measured from November’s all-time highs.
Investors will be relieved the year is ending given the market turmoil. The problem is that the macro environment remains one of higher interest rates, the industry is still absorbing the fallout from FTX, and global outlooks remain very uncertain.