1. Your keys = your funds: no matter who or where the keys are stored, whoever has access to the private key owns the funds. During 2022 we have seen thefts, frozen funds, suspended withdrawals, bankruptcies, and even exchange crashes… if you don’t have access to your private key, then you have no control over your funds.
2. Custody matters: in 2022, after several terrifying events, the debate on third-party custody or self-custody is back on the table. Do financial institutions still think after 2022 that the way forward for the implementation of digital assets in their portfolio should include third-party custodians (whether they are small startups or large listed custodians) as the “vault” for their clients’ digital assets?
3. Crypto correlation: in 2022 we have seen how correlated digital assets are becoming to the traditional markets. A couple of years ago, bitcoin and other cryptocurrencies were seen as fantastic uncorrelated assets, for investors to mitigate overexposure to certain assets/markets. Today, unfortunately, we see a strong correlation with indexes, FX markets, and even the duo of inflation & interest rate.
4. A collateral cannot be just any asset: last year we saw how some exchanges, and even some so-called stablecoins, used as proof of reserves other volatile crypto assets, or even their own issued tokens. Of course, when the storm breaks it hits everything that is not firmly anchored to a solid base. Over the last year, we have seen huge contagion domino effect that has affected tokens, exchanges, and even stablecoins that have lost parity, basically caused by poor reserves that were also not as liquid as many of us had thought.
5. Accounting principles and business fundamentals apply, even in crypto: during 2022 after some unfortunate events, scandals revealed that large crypto businesses were operated by individuals without the appropriate skills, knowledge or ethic, even using simple accounting software designed for freelances or startups, but using it for large Exchanges with a valuation of USD 32billion.
In summary, the opportunities of digital assets as operational currencies for business are numerous, and there are many reasonable benefits to incorporating them into a company’s treasury. However, we should never make a false step when it comes to such important decisions as the liquidity and future viability of our business.
If we have learned anything in 2022, it is that crypto technology and the crypto environment is still evolving and consolidating, and this phase will not be over until crypto markets become more and more “regulated markets” and we have legislative frameworks such as MICA in place.
