Word of the year 2022: Contagion

The crypto credit crisis defined 2022. Its origins can be traced back to the 2020 Grayscale-arb. Terra was the catalyst, which in turn led to the fall of 3AC, Celsius, FTX, and more. As we enter 2023, the cycle is about to close full circle with DCG.

2022 has been a yearlong hangover. 2020-2021 was a zero-interest rate policy party, rewarding the most suave party attendants for extreme risk-taking. Combine easy money, extreme returns, and nascent explorative visionary tech with intricacies understood by few, and you have a proper breeding ground for charlatans and fraudsters. During the two-year-long extravaganza of 2020 and 2021, many were enchanted by the suave. This caused an unsustainable build-up of credit towards the “bravest” risk-takers.

Cheap dollars, utter conviction, poor risk management, and bad business decisions were the precursor for the devastating credit crisis experienced in crypto this year.

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