Multiple crypto companies collapsed or filed for bankruptcy by the end of 2022 amid an ongoing global economic slowdown. Despite the upheaval, industry analysts are confident that the downturn filtered out shaky and evidently risky firms from industry that is already suffering from volatility. Steadier hands and more durable companies will be participants in the crypto sector, Dante Disparte said in a recent post for the World Economic Forum (WEF). Disparte is the chief strategy officer of Circle, the issuer of USD Coin.
Between 2022 and 2023, the overall crypto sector lost over $2 trillion (roughly Rs. 1,65,74,700 crore). The Russia-Ukraine war, the recession that followed the COVID-19 pandemic, repeated hack attacks, and the collapse of promising crypto projects like LUNA and FTX slashed investor engagement in the sector.
While companies like CryptoCom and Binance among a number of others resorted to trimming their respective work forces, firms like BlockFi, Celsius, and Voyager Digital filed for bankruptcy.
“Policymakers who have been sounding an alarm about crypto's excessive risks, while failing to create sensible regulations, have been vindicated by not one, but multiple large-scale failures,” Disparte's WEF post said, highlighting how the global authorities have more ides on things to be careful about.
Disparte has called the slump in the crypto market as a period for broad industrial connection.
“The crypto correction, amid broader economic turmoil and risk-off behaviour in capital markets, also vindicates companies that have prioritized a regulation first approach, and worked to build deeper levels of trust, transparency and accountability when compared to other market actors,” Disparte noted in a Circle blog.
Last year, the adoption of crypto assets by retail players saw the light of the day. From market leading chains like the AMC Theatres in the US to a teaseller in India's Bengaluru city, many small and large businesses adopted cryptocurrency payments.
Over 75 percent small, medium, and big retailers in the US are looking to integrate crypto payment options with their services over the next two years, as per a Delloite report titled ‘Merchants Getting Ready For Crypto'.
At this point, industry analysts are hopeful that the ongoing rough days, along with upcoming regulations around the crypto sector, would make the industry safer all together.
Under its G20 presidency, India is looking to collaborate with other nations in formulating a crypto rulebook, that would work uniformly on an international level.
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