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December 2022: One Click Crypto Report

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December 2022 Crypto Market Summary. Year in Review. The State of Bitcoin, Ethereum. 2023 Web3 Trends. AI Trading Update.

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January 2, 2023
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It’s hard to believe that another year went by, and what a ride it was. Wars, record-high inflation, crypto domino effects, rise and falls of multi-billion dollar companies. After all these setbacks, the Web3 industry is ready to transition to its next level of sophistication. And having the best sources of knowledge of this everchanging framework will be critical to thrive in the new digital economy.

In the December 2022 One Click Crypto Report you will find:

Key points

  • The State of Crypto in December 2022
  • The State of Bitcoin
  • The State of DeFi & Ethereum
  • Macro Outlook On The World’s Economy
  • Crypto In 2022. A Year In Review
  • Moving Forward In 2023. Web3 Trends To Look For
  • One Click Crypto’s 2022 Journey
  • AI Crypto Trading 2022 Performance
  • Final Word

Part 1: Market Summary

1.1 The State of Crypto in December 2022

Total Crypto Market Cap

In December, the global crypto market cap declined by -5.73% to $759B. The sharpest decline was recorded between Dec 14 and Dec 17, when FUD around CEXs proof of reserves (PoR) data raised questions, specifically those of Binance, which saw increased outflows earlier the same week.

Source: One Click Crypto Research

Binance saw an outflow of 75,837 BTC between Dec 12 and Dec 18 for a total of -$6.28Bn in withdrawals. Meanwhile, Mazars, a global accounting firm, has halted all work with its cryptocurrency clients, including Binance, KuCoin, and Crypto.com, citing concerns about how the public understands its proof-of-reserves reports.

Source: CoinGlass

Breakdown Of The Cryptocurrency Market

The bulk of cryptocurrencies declined in December, with BNB being one of the biggest losers (-17.98%) of those coins with a significantly large Mcap. Depending on the source, Bitcoin dropped between -5% and -2%, while Ethereum lost about -7.31%. Dogecoin (DOGE) crashed by -30.39%.

Total cryptocurrency market cap for December 2022 (taken on Dec 31 at 12:00 UTC). Source: TradingView

Five Gainers Among The Top 50 Coins

Out of the top 50 cryptocurrencies by Mcap, there were 5 gainers, with Toncoin (TON) surging by +20.21% and OKB rallying by +16.35%. One of the oldest crypto coins, Monero (XMR), also had a green month with a +2.21% ROI.

Source: CoinCodex

The State of Bitcoin in December 2022

Bitcoin currently accounts for 39.95% of the total market cap of crypto. With that much dominance and the fact that almost all other currencies follow the trend of BTC, it is important to analyze its performance.

200-Week Moving Average Heatmap

In December, Bitcoin broke below its 200-week moving average, which raised concerns among some analysts. The first weeks of 2023 will be critical to determine if this bearish indicator will have a more significant impact.

Source: Blockchain.com

Miners Revenue

In 2022, Bitcoin miners’ revenue dropped substantially from over $50M to below $20M, with several key mining companies going bankrupt, with Core Scientific being the latest (Dec 20, 2022).

Source: Blockchain.com

Hash Rate

Bitcoin’s hash rate experienced a stress test on Dec 25, when due to cold temperatures in the US caused, miners were forced to stop operation for some time, causing a -40% plunge in the network’s hash rate, which was quickly recovered several days later. Overall, there were no serious concerns about a 51% attack on Bitcoin in 2022.

Source: Blockchain.com

Bitcoin 7-Day MA Realized Profit/Loss Ratio Sets New All-Time Low

According to Glassnode’s weekly report, the realized profit/loss ratio has assumed its lowest value ever recently, indicating that even long-term holders were hit by 2022’s crypto winter.

Source: Glassnode

1.2 The State of DeFi in December 2022

Total value locked

The DeFi market got a further discount of -15.89% in December. This marks the end of a difficult year for the whole cryptocurrency market. Still, DeFi remains the core for true Blockchain-powered financial systems, and according to hedge fund managers, this year was a philosophical win for the technology as the problems of TradFi systems in crypto were exposed, and the necessity of true decentralization got clearer.

Source: One Click Crypto Research

Breakdown:

Among the leading DeFi protocols by Mcap, MakerDAO and Lido remain dominant at around 15.23% each, while AAVE accounts for 9.87% of DeFi’s TVL.

Source: DefiLlama

Ethereum’s Correlation To Bitcoin And SP500

Ethereum reached a correlation of ~96% to Bitcoin and 87% to SP500 at the end of the year.

Source: One Click Crypto Research

Peak of Daily Active Addresses

In December, the Ethereum network reached a peak of active addresses of 1,48M, while the total number of ETH addresses kept increasing steadily throughout the year.

DEXs Volume:

In December, the volume of decentralized exchanges (DEXs) dropped from $104.8B to $44.62B (-57.4%). While the FTX collapse in November increased interest in DeFi, there is still a barrier to consistent inflow month-to-month.

YTD monthly DEXs volume. Source: DefiLlama

Most Profitable Protocols From Fees/Revenue

Among the 10 most profitable protocols for December are Lido, with $25.49M in revenue, and Convex Finance, with $10.24M in earnings. Aura Finance which is in tenth place, has generated around $1.40M in income.

The most profitable protocols by total revenue in the last 30 days. Source: Messari

Stablecoins Circulation

Ethereum remains the leading blockchain for stable coins with a 62.13% market share, followed by the Tron network at 24.39%. The total market cap of stablecoins is $137.92B as of December 2022.

Source: DefiLlama

Low Mcap Good Performers

While DeFi declined in volume and TVL, there were a few good performers with a lower market cap. Mento, an automated market maker (AMM) type of DEX within the Celo platform, rose by +76.94% in December.

Source: DefiLlama

DeFi Raises Continue

Meanwhile, the total funding amount in DeFi has reached $91.12B, with 2022 bringing $21.28B. That’s less than the sum Q3-Q4 2021 but is still above previous years, indicating that the bear market didn’t stop VCs from investing.

Source: DefiLlama

More Metrics To Look At In The Near Future

DeFi analyst tools are growing in popularity, and we’re expecting several new software to be released in Q1, 2023, like DefiLlama’s risk assessment kit.

1.3 The State of Centralized Exchanges in December 2022

Proof-of-Reserves

After November, centralized exchanges initiated a campaign for more transparency, starting with Binance and their proof-of-reserves announcement. Other exchanges like Crypto.com followed while critiques of the system shared their concerns about the lack of “real transparency” on the number of liabilities.

Binance’s PoR shows that the CEX has a net worth of $53.48B. Source: Glassnode

Analyst firms quickly released comprehensive tools to monitor PoR. Our top three picks are:

1) Nansen’s Entities 2) Glassnode’s PoR Dashboard and 3) DefiLlama’s CEX Transparency

Circulating supply of BTC & ETH on CEXs

Another interesting trend is the outflows of Bitcoins and Ethers from centralized exchanges. In 2022 the circulating supply on CEXs’ BTC dropped by 482k while 6.90M ETH was moved out.

Source: CryptoQuant

Disclaimer: This is not financial advice. This report is strictly educational and does not provide investment advice, solicit the purchase or sale of any assets, or encourage readers to make financial decisions. Please use caution and conduct independent research.

1.4 The State of The World’s Economy in December 2022

The cryptocurrency market remains a small fraction (0.83%) of the world’s economy. Therefore, it is essential to pay attention to macro trends and the correlation between decentralized and traditional assets.

Global Inflation

On a global scale, the economy looks grim, with the average inflation in the world reaching 7.4% in 2022.

Sources: Trading Economics on the left and Financial Times on the right.

Long-term Interest Rates

To reduce inflation, governments worldwide have raised interest rates, with countries like the US breaking 30-year-old record hikes earlier this year.

Source

Commodity Markets

During December, the commodity market had a contrasting performance, with Gasoline and Heating Oil ranking at +6.32% and +2.53% gain, respectively, while Natural gas dropped by -33.09%.

Source: Trading Economics

Bitcoin vs. Gold

In 2022 the Bitcoin to Gold ratio dropped to a low of 9.162.

Source: Longtermtrends

Bitcoin vs. the US, Europe, and China Index Funds

During the 2022 recession, everything went down, but crypto, led by BTC experienced a sharper decline.

Source: GoogleFinance


Part 2: Research

2.1 Crypto In 2022. A Year In Review

Some describe 2022 as the worst year in crypto’s history, but it is just another piece from the cyclical pattern that shapes this revolutionary technology. The 2022 crypto winter is comparable to the 2014/2015 decline but is still far from 2018/2019 and 2019/2020 market bottoms.

Read article

2.2 Moving Forward In 2023. Web3 Trends To Look For.

Below is a list of 9 of the Web3 trends that currently are gaining momentum and will be part of the 2023 industry growth.

  1. Social DeFi
  2. DeFi/Crypto Risk Insurance
  3. NFT Liquidity Tools
  4. Advanced Trading Tools For DEX
  5. Rise of Mov…
Read article

2.3 More Research

Read our latest article on the era of re-wired investors to find out how web2 + web3 enabled a new generation of self-custodial investing. Link to Medium.

Other research articles:

The Greatest Cryptocurrency Trades and Their Success Stories
Top 7 Artificial Intelligence Investments For The 2023 Recession
AI Crypto Trading Bot With 100% Accuracy
Top 5 Crypto Trading Bots For December 2022: Performance Review
Can AI Trading Bot Beat ETH By +0.23% Daily?
AI Trading Bot: Understanding Its Behavior And Decision-Making Patterns
15 Crypto Funds 2021–2022 Performance
How Computers Became Better Wealth Managers Than Humans
Will Regulations Kill Decentralized Finance Or Save It?
World’s Richest Gamblers (Investors) — Making Billions With Mathematics
How Did AI Respond To The Terra (LUNA) Meltdown?
The Impact Of Inflation On The Cryptocurrency Market
Time In The Market Vs. Timing The Market: Why Even Long-Term Holders Lose Money In Crypto
Investing During A Bear Market: How To Not Lose Your Money In Crypto
Can Bitcoin Solve The Money Problem? Why Money Is Dead.
DeFi Trends In 2022 Web3. Is The Future Of Finance On The Blockchain?
Should You Invest In Funds? Real State Of Wealth Management Market in 2022.
What Strategy Saves The Most Money During a 50% Ethereum Drop?
Making Money In Crypto: 10 Proven Tactics For Effective Cryptocurrency Investing.
AI/ML In 2022. Why investing in tech projects will set you apart for a lifetime.
AI In Cryptocurrency Trading: The Big Picture
Can AI Outperform The Bear Market?

Part 3: One Click Crypto

3.1 Our 2022 Journey

2022 has been turbulent for the crypto industry, and it has also been transformative for One Click. Our company has undergone multiple changes and achieved important milestones, from launching an NFT collection on Solana to an institutional trading bot offering and the announcement of the DeFi platform later this year.
Below is a timeline of our most significant highlights of the year.

Read article

3.2 AI Crypto Trading 2022 Performance

Aggregated Performance in December and 2022.

In December, the aggregated performance of One Click Crypto’s trading strategies was -4.05%, while Bitcoin (BTC) and Ethereum (ETH) performed at -6.73% and -7.72%, respectively.

Source: 1CC app

Overall, in 2022 BTC and ETH suffered tremendously, sending the whole crypto market to a nearly -70% drop. Bitcoin lost -64.01%, while Ethereum crashed by -67.34%. AI was a life savior to many investors, especially during the Luna meltdown. One Click Crypto’s trading strategies end the year at -14.05% YoY.

Source: 1CC app

Best Performing AI Trading Bots In December 2022

In December, the best hedging tools against the market in One Click’s assortment were Performer v1 (P1) at -0.13%, Clipper at -2.91%, and Solar at -3.65% ROI.

Source: 1CC app

Best-Performing Market Pairs In December 2022

Performer v2 managed to profit by +29.04% in LUNC: BUSD in December, while P1 gained +5.61% and +5.16% on MATIC: BUSD and ETH: BUSD, respectively.

Source: 1CC app

Historical Track Record

Outperforming Bitcoin

One Click Crypto vs. BTC Jan 15, 2021 — Dec 29, 2022. Source: 1CC Internal Stats

The graph focuses on the average performance of all BTC trading strategies on One Click Crypto. The AI-managed BTC outshines the underlying asset by +59.76% over 23 months, showing a positive long-term trend.

One Click Crypto’s long-term results against Bitcoin:

1CC: +2.57% | BTC: -57.19%

Outperforming Ethereum

One Click Crypto vs. ETH Jan 14, 2021 — Dec 29, 2022. 1CC Internal Stats

The AI-managed Ethereum strategy outperformed ETH by +149.73% over 23 months, with an even stronger long-term projection trend than Bitcoin.

One Click Crypto’s long-term results against Ethereum:

1CC: +146.79% | ETH: -2.94%

More AI Crypto Trading Case Studies

Below is a collection of our AI crypto trading case studies in 2022.

BONUS:

Our two articles on 1CC’s investment thesis and the reasoning behind AI portfolio management technology.

Disclaimer: This article is not intended to serve as financial advice. The sole objective is to provide an educational perspective on the current state of Web3 and to identify trends that are gaining momentum. Investing in products, tokens, or company shares associated with these trends will not necessarily result in financial gain. Always conduct your own research and seek the advice of a financial professional.

Final Word

The 2022 crypto bear market became highly associated with the dot-com bubble of 2001.

Both periods’ rapid rise and collapse of companies saw unprecedented speculation and skepticism among all layers of investing and society. Now, twenty years after the Internet boom, the world can’t live without this revolutionary technology. Over 71% of small businesses have a website, and the amount of computer data doubles every two years, according to Moore’s Law.

However, a less common fact is that the Nasdaq composite needed 15 years to recover after the early 2000s crisis before eventually getting into a five-year 200%+ rally in 2016–2021 (Web2’s peak).

Does that mean the long Web3 summer will be somewhere in 2037? More likely not. A decade-long stagnation for the cryptocurrency market might not happen, thanks to the rapid developments in Blockchain and DeFi in recent years. The exponential rise of AI/ML case studies we see every day will be another leading contributor to a shorter bear cycle for the tech industry as a whole, as machines are working alongside humans now.

The only question is, can we get a catalyst as early as 2023?

Grow your Crypto with One Click.


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