2022 has been catastrophic for countless investors as cryptocurrency exchanges collapsed, the NFT market deflated, and bitcoin remained generally flat for six months. For many crypto billionaires, 2022 was also atrocious, condolences notwithstanding. $116 billion was lost in total from founders, CEOs, and professional investors between March and December. 

8 crypto billionaires who lost big in 2022:

According to a report compiled by Forbes, big-name investors lost a combined total of $116 billion in cryptocurrencies in 2022 alone：

What crypto investors did wrong

1. Trusting custodial wallets

   The biggest lesson from 2022 comes from the fallout of FTX and TerraLUNA: using custodial wallets (third-party storage) to hold your crypto is a bad idea. Investors let so-called stablecoins, like USDT, stand in the gap until LUNA collapsed and cash-out conversions became log-jammed, preventing withdrawals as the price dropped.

2. Giving into FUD

   Fear, Uncertainty, and Doubt run rampant throughout the crypto markets. It is easy to give in and let these emotions dictate financial decisions - several did. Many were jumping in and out of one digital asset to another based on momentary enthusiasm.  

3. Mismanaged projects

   Many investors simply did not do enough deep diving into the projects that they invested in, let alone the platforms and tools they used to transact their investing. Too many crypto investors were too quick to trust founders of projects who over-promised and under-delivered whether through incompetence or malice.

What crypto investors can learn

1. Use self-custody

   The oft-quoted phrase “not your keys, not your crypto” has never been more proven than in 2022. While using hard wallets can be a clunky system for investors to utilize, they must nonetheless be willing to take possession of and responsibility for their own portfolios. The events of 2022 gave a boost to 

2. Strategize and be patient

   Developing a strategy that does not treat crypto as though it were a tech stock but rather a , stop losses, risk management, and investing philosophy will go a long way for investors who want to ward off FUD and other emotions when “opportunities” present themselves. Relying on one’s data-driven strategy is always the best bet. 

3. DYOR

   Do Your Own Research is another mega mantra that crypto investors can learn from 2022. As Warren Buffett has famously said, “don’t invest in something you don’t understand.” Many investors got swept up in the wave of web3 and ignored the underpinnings of the projects they bought into and paid dearly for their disregard.

A new direction

All investors need to learn from the mistakes, crimes, and plain ignorance that were rampant in 2022 to refortify their portfolios and profit in 2023. Sam Bankman-Fried, Caroline Ellison, and Gary Wang all gave up their billion-dollar status in 2022 because of odious ambitions, distracting them from possible legitimate upsides. 

Meanwhile, retail investors who developed educated strategies did their own research, hedged their losses, and even made significant gains. Blockchain technology has revolutionized a lot of how technology works and how it is interfaced with. However, nothing will ever change how money is made.