Crypto companies have felt the pinch this year after a crypto winter that lasted all year round. Several companies had to let go of some employees, while others closed shop altogether. But not all companies felt the heat (or cold). In fact, the misfortunes of some companies have provided an opportunity for others to thrive.
User confidence in centralized exchanges (CEX) has hit an all-time low, thanks to FTX.
Because of this, we have seen unprecedented interest in self-custody solutions, with companies providing such solutions doing exceptionally well.
In this piece, we’ll discuss some of those companies and others that have fared better in the ongoing bear market.
It would be unrealistic to expect a perfectly seamless operation for any crypto asset – after all, this is crypto with its chaos, FUD and wild volatility. So, it is normal for a crypto exchange to undergo difficult times. This is true for Binance. The world’s largest cryptocurrency exchange (by volume) is being tested, but will likely come out relatively unscathed.
First, the exchange witnessed a massive bank run, with users moving as high as $3 billion in the 24 hours leading up to Dec. 13, according to on-chain data analytics firm Nansen.
The bank run was accelerated by the industry’s skeptical reactions to the stock exchange proof audit report. Binance had commissioned the report to reassure customers about its solvency in the wake of FTX’s fall reports on the exchange’s legal issues that contributed to the bank run.
Regardless, Binance is poised to perform, especially with the absence of its biggest rival, FTX. Of the $3 billion outflowing, the company still has over $60 billion in holdings. In addition, the exchange is the most high-profile one that has not fired workers, demonstrating its health and solidity.
Crypto.com faced a number of headwinds this year, but stronger ones emerged. His card rewards cut, popular in the crypto community, didn’t bode well with users. The exchange was also the target of a hack in January of 2022 that affected 483 users and was worth $35 million.
In response, the exchange implemented the Worldwide Account Protection Program (WAPP) as insurance for future hacks. Under the program, users who qualify are entitled to a refund of up to $250,000 in the event of loss of funds in a security breach.
Crypto.com also had to clean up the air recently when he mistakenly sent $400 million ETH to Gate.io, triggering speculation and suspicion. Very recently, Twitter had lit up with chatter that Crypto.com possible to be the next dominoes to fall after FTX. Marszalek used YouTube to reassure users of the exchange’s solvency through an AMA (Ask Me Anything) that allayed users’ fears.
In addition, the company is growing exponentially. Users on the platform now come to around 70 million, a huge jump from 50 million in May and 10 million in February 2021.
Basically Crypto.com falls into the “No news is good news” category for trading over the past 12 months.
Decentralized exchanges (DEXs) have never enjoyed widespread recognition in cryptocurrencies. For example, Uniswap – the largest DEX has only a measly 2.5 million users compared to Coinbase’s strong user base of 70 million.
But DEXs have suddenly become a more attractive option in front of FTX. After the fall of the exchange, Uniswap overtook Coinbase to become the second most popular exchange after Binance for ETH trading.
In general, the exchange witnessed an increase in transaction volume after FTX entered into a non-binding agreement to merge with Binance (Binance would later abandon the deal). Uniswap currently has the lion’s share of all DEX trading volume.
Uniswap has had a great year overall. In October, the exchange secured $165 million in one of the largest rounds of funding from the bear market this year. The company will strengthen its web app and development tools with funding, invest in NFTs, and more. The new liquidity injection brought Uniswap’s total valuation to $1.66 billion.
In another milestone, Uniswap, which has not laid off employees this year, has crossed the $1 trillion transaction threshold since its inception four years ago.
Bear market or not, cold wallet maker Ledger had a good year. The France-based company unveiled its latest iteration of the hardware portfolio, Ledger Stax, earlier this month.
Ledger reached out to Tony Fadell, who famously designed the Apple iPod, to help create the wallet.
With the Ledger Stax, the company hoped to create a sleeker wallet that would win over “more traditional users” than previous models, according to the launch press release.
The wallet gets its name, “Stax,” from having magnets so that more can be stacked together, just like stacking books.
Here are other highlights of Ledger Stax:
- E Ink display that allows you to view your transaction history at any time
- High battery efficiency (power life from weeks to months) and wireless charging
- Laptop, smartphone, and web app connectivity 3
- Ability to manage over 500 cryptocurrencies
- Ability to manage your NFT collection
Stax is another milestone for Ledger, which boasts over five million purchases and has never been hacked (at least the devices themselves). With the launch of the new device, Ledger meets the moment. The company’s CTO said on Twitter that it experienced “massive usage” that caused a server outage after FTX collapsed.
Trezor is another crypto company that has crossed the bear market in 2022. Users tend to flock to wallets in times of uncertainty. Once again, after the implosion of FTX, it benefited from the title of one of the most trusted hardware wallet providers. The Prague-based company reported a 300% increase in sales revenue the week the FTX drama unfolded.
The crypto community welcomed the news, calling the success of Ledger and Trezor the only upside after the FTX disaster. That upside is that more and more crypto investors are opening their eyes to self-custody.
Final thoughts: bright spots in a dark time
It’s nice to see some bright spots in this year’s prolonged bear market that no one predicted would be limited by the FTX shutdown.
You have crypto exchanges like Binance, Crypto.com, and Uniswap still strong, and self-custody solutions offered by Ledger and Trezor basking in the spotlight.
There’s a good chance we’ll be able to add many more companies to this list by the end of 2023.