As a financial news writer, I picked the perfect time to take on a crypto news beat. In April 2021, deflationary cryptocurrencies were surging and near-zero interest rates opened the floodgates of speculative investing. Many people were hearing about crypto and the blockchain for the first time. As I built out my beat, the crypto market capitalization swelled to nearly $3 trillion in value. And in the next year, it all fell apart.
Throughout the last two years, the crypto industry has experienced the good, the bad, and everything in between. It has also changed dramatically.
Wall Street now cares about digital currencies, and so do regulators. Crypto is a hive for controversy, due to the many mysteries and scams that have occurred in just 24 months.
With the crypto winter nearing its end, let’s dive in to some of the biggest crypto news stories from the last two years.
No. 1: Dogecoin Surge Creates Meme Coin Mania
The crypto market wouldn’t be the same without Dogecoin (DOGE-USD). DOGE brought crypto to the attention of thousands, if not millions, of people. It also made a lucky few investors into millionaires along the way.
In the early weeks of April 2021, Dogecoin underwent a break-neck surge from 5 cents to 74 cents in just a matter of days. This event inflated DOGE’s market cap from $500 million to almost $40 billion.
DOGE’s unlikely gains stirred up some of the most feverish crypto pumping, and its rise served as inspiration for both well-meaning tokens and rug-pull schemes alike. This surge was driven in large part by Elon Musk and a bevy of other celebrities. Dogecoin also received lots of love from brands like Slim Jim and Newegg (NASDAQ:NEGG), with companies minting non-fungible tokens (NFTs) and hosting Doge-themed promotions.
While many have tried to fuel the fire since then, Dogecoin has never revisited its all-time high. However, its impacts on the crypto industry have permanently changed the game.
No. 2: Shiba Inu Lands a Robinhood Listing
Shiba Inu (SHIB-USD) can safely say that it predates the Dogecoin frenzy, first launching in September 2020. However, without DOGE, SHIB would never have reached its own peaks, culminating in its Robinhood (NASDAQ:HOOD) listing.
Alongside DOGE in April 2021, the SHIB crypto gained more than 2,000%. Since it traded still for well below 1 cent, many investors gravitated toward it in anticipation of another Dogecoin-esque run. And unlike a lot of the other dog-themed DOGE clones, Shiba Inu came with robust plans. Its developers implemented complementary tokens, planned a layer-2 network and launched a metaverse.
Its grandest achievement was its listing on Robinhood. Investors had been begging the trading app to adopt SHIB, given Robinhood’s accessibility to retail traders. With a lot of Shiba Inu fans believing such a listing could catalyze the next bull run for the token, a petition to list it on the app received hundreds of thousands of signatures.
Ultimately, this community-based effort paid off, with Robinhood listing the token in April 2022. Unfortunately for the community of die-hard SHIB fans, it didn’t create big gains like many expected, especially since the listing came so long after SHIB was at its peak popularity. Still, it makes for an interesting story about how individual investors can mobilize and influence the market.
No. 3: FTX Collapse Makes Crypto’s Enron Story
The crypto story that had the largest impact on the investing world was the collapse of FTX.
The crypto exchange, headed by Sam Bankman-Fried, was riding through the crypto winter of 2022 on a high note. But, the good times ceased unceremoniously, with the company embroiled in conspiracy and its founder facing a potential century in prison.
Bankman-Fried’s crypto empire seemed unstoppable. When crypto companies were going bankrupt left and right, FTX was funding bailouts and acquisitions. It bragged about having billions of cash on hand. It beat out Binance in an auction to purchase Voyager Digital’s assets. And then, just over a month later, a CoinDesk report prompted a bank run that sent FTX spiraling into bankruptcy. It turns out FTX was co-mingling its funds with sister company Alameda Research and lying about its balance sheet.
Bankman-Fried’s luck soured even more in the following months as he was arrested and put in FBI custody. He faces a potential 115 years in prison for his company’s dealings, and his business partners are cooperating with the government to establish his guilt. Most importantly, the FTX story has ruined investors’ relationships with crypto exchanges and custodians.
As the second-largest crypto exchange in the world, if investors can’t trust FTX then which exchange can they? It’s a question that companies will be grappling with for years to come as the industry reckons with the fallout.
No. 4: FBI Targets Crypto Queen Ruja Ignatova
Let’s not forget that Sam Bankman-Fried didn’t invent crypto crime. The market was far from squeaky-clean before FTX’s downfall. One story here particularly stands out: The “Crypto Queen’s” disappearance landed a crypto criminal on the FBI’s Most Wanted list for the first time ever.
Ruja Ignatova’s story begins far before I started writing about the crypto industry. Ignatova began her journey to infamy in 2017. The project she founded in 2014, OneCoin, was supposed to be the next Bitcoin (BTC-USD). Instead, Ignatova took the money she accumulated from clients in a three-year span and effectively dropped off the face of the Earth. These assets totaled approximately $4 billion.
Lawmakers have tried in vain to locate Ignatova, and she has been charged in absentia for crimes relating to her Ponzi scheme. If ever found, the Crypto Queen could face decades of prison time. In 2022, investigators took their efforts up a notch, offering a $100,000 reward for information relating to Ignatova’s disappearance. They also gave her a spot on the FBI’s Top 10 Most Wanted list.
In 2023, she has shown signs of life, listing her London property in January. The saga continues to leave investigators scratching their heads, and it has been immortalized in the form of a true-crime docuseries.
No. 5: Texas Power Grid Shuts Down Crypto Miners
The crypto mining migration between late 2021 and 2022 was brought on by increasing scrutiny toward the practice. Lawmakers and concerned citizens alike had stared wide-eyed at charts covering the energy usage of miners and the barns filled with thousands of mining computers, churning 24/7. Worldwide, nations began to clamp down on the practice. Several U.S. states have also cut ties with miners.
This has opened doors for Texas in its attempt to become the crypto mining capital of the world. But miners learned the hard way that the Lonestar State may not be dreamland.
Gov. Greg Abbott has instituted tax incentives and granted North Texas land to crypto miners. In doing so, Abbott and other Texas lawmakers are looking to become a new Silicon Valley for the crypto industry. However, the gamble relies on two big assumptions. The first is that the crypto industry not only lasts, but remains profitable. The second is that the state’s independent energy grid can support the practice. Already, this second assumption has been challenged, and it presents a wake-up call to miners escaping to an assumed land of milk and honey.
The heatwave that passed through the state in the summer of 2022 challenged the Texas energy grid. It was so significant that with fears of death at the hands of the brutal heat, Texas forced miners to cease operations. Had the state not taken action, crypto mining would have likely caused the second grid failure in 2022.
Now, this precedent will eat into profits and keep miners constantly wary of future halts. The gamble on crypto is no doubt one of the riskiest by governments.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
