Dispatch #119: 2022, Part 1 aka What We Want to Forget but Shouldn’t

4 min read

In this patch of your weekly Dispatch:

  • The un-fun part of 2022, starring:
  • People behaving badly
  • Regulatory setbacks

In the next patch of Dispatch: the good part of 2022. 🎉

2022: The Bad & the Ugly

A List of Terrible Events/ Decisions

As the famous saying goes, it was the best of times, it was the worst of times. Reuters even called this year an “annus horribilis.” And while it is hard for most not to view 2022 as more “worst” than “best”, we should never forget the worst events of 2022 so that we never allow the same mistakes to happen again.

Over the next two weeks, Dispatch is splitting our year in review into two parts:

⬇️This week, we cover the worst of 2022 – and boy, was there some choice in this category.

⬆️Never fear though, for next week we’ll close out the year with the most inspiring of notes. There was A LOT of great stuff this year AND the best is yet to come.

For now, with no further ado, the worst of 2022, in no particular order.

This Year In…

Recession & Inflation

As COVID-19 swirled in early 2020, the US Federal Reserve led the central banks of the world to pile on easy monetary policy, supported by fiscal relief as well. This surplus cash plus pent-up demand led to runaway inflation. Last year, many in the crypto community commented that it was probably time for the Fed to try to mitigate inflation before it got out of hand, but alas, they did not.

Instead it took until March of this year for the Fed to begin tightening, by which point inflation was so out of control that they’ve been forced to ratchet rates up at the fastest pace in 40 years. It has been devastating for risk assets of all types, and many believe that the Fed’s only real path to reduced inflation now is to engineer a recession. Woof.

This Year In…

Terra Luna and the End of Algorithmic Stablecoins

Terra UST was an algorithmic stablecoin designed to go up as more people bought it. Unfortunately, the reverse was also true, and when it started crashing in the early middle part of the year, it ended up inflating to infinity and crashing the entire Luna ecosystem with it. Not only did this wipe out a huge number of retail investors, it also - as we would discover - sewed the seeds for much broader institutional failure.

This Year In…

3AC Not Being the Smartest Guys in the Room

Throughout the last bull market, hedge funders Su and Kyle of Three Arrows Capital (3AC) got a reputation for being some of the smartest commentators and savviest operators in the crypto space. However, in the weeks following the Terra Luna blowup, rumors of a major crypto hedge fund becoming insolvent started to rise. Turns out, it was 3AC, and in many ways what they were the best at was riding the cycle’s wave of hype and poor diligence. It was a wave that came crashing as the crypto credit crunch hit.

This Year In…

SBF Being the Exact Opposite of What He Espoused

The capstone of the year’s pain for many was the complete and incredibly rapid implosion of FTX. From on top of the world at the end of October, by November 11th the company had declared bankruptcy. In the weeks that have followed, we’ve all learned that SBF was far different from his effective altruist image. As we write, he is negotiating with US prosecutors to be extradited from prison in the Bahamas to be arraigned on eight criminal charges of fraud.

This Year In…

Regulation by Еnforcement

Another year, another wasted opportunity for positive good faith movement on regulatory issues. Towards the end of the year, it became clear that despite rhetoric to the contrary, the US refuses to provide a path forward for enabling blockchain businesses to operate in their clients’ best interests.

The Year’s Most Interesting Data Story

The Fear & Greed Index

Crypto market participants can be quite emotional. But how do we measure the emotions we succumb to? One great gauge is the Fear and Greed Index, which shows just how much we can over- and under-react sometimes. For most of 2022, the index never exceeded 50 as a mark (zero means "Extreme Fear", while 100 means "Extreme Greed") which demonstrates our collective confusion quite vividly. For the past couple of months however, the developments following the FTX collapse, the arrest of SBF, and the yet unclear actions of regulators undoubtedly helped sustain the current “Fear” sentiment in the space for a prolonged period.

Hot Topics

Anti-Tweets of the Year

Where we finally knew he had lost his mind.


Just painful.

What to Watch for Next Year:

  • How much longer will our industry be driven by “Fear?”
  • Justice is important. Will those responsible get theirs?
  • How long will it take for the contagion to flow through the system?


A Note from the Editor

All of this together has left some in the industry in a depressed, frustrated, and in some cases downright angry state. For many, it’s hard not to feel like all of this bad behavior and negligence has undermined and diminished the real accomplishments, good work, and sincere ambitions of the builders in the space.

And yet, to paraphrase Albert Camus: In the midst of winter, we found there was, within us, an invincible summer.

In next week’s Dispatch, we come storming back with why 2022 won’t be remembered just for the bad, but as one of the most foundational years in the industry’s history. 💪

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