Chainalysis: FTX Crisis Comparatively Smaller Than Mt. Gox’s

Chainalysis: FTX Crisis Comparatively Smaller Than Mt. Gox’s By DailyCoin

Breaking News

‘;

Cryptocurrency 9 minutes ago (Nov 24, 2022 08:30AM ET)

Chainalysis: FTX Crisis Comparatively Smaller Than Mt. Gox’s

  • Chainalysis concluded that FTX was a far lesser player in the cryptocurrency market than Mt. Gox was.
  • The first Bitcoin exchange, Mt. Gox, crashed in 2014, yet crypto survived.
  • “There’s no reason to think the industry can’t bounce back from this, stronger than ever.”

Chainalysis, a company that analyzes blockchain data, draws parallels between the collapse of FTX and that of Mt. Gox to predict the effects of such a tragedy on the cryptocurrency ecosystem as a whole.

The research lead at Chainalysis, Eric Jardine, recently compared the two firms’ market shares in a Twitter thread on November 23. He discovered that in the year preceding Mt. Gox’s implosion in 2014, the exchange attracted an average of 46% of all inflows, whereas FTX received an average of 13% from 2019 to 2022.

.tweet-container,.twitter-tweet.twitter-tweet-rendered,blockquote.twitter-tweet{min-height:261px}.tweet-container{position:relative}blockquote.twitter-tweet{display:flex;max-width:550px;margin-top:10px;margin-bottom:10px}blockquote.twitter-tweet p{font:20px -apple-system,BlinkMacSystemFont,”Segoe UI”,Roboto,Helvetica,Arial,sans-serif}.tweet-container div:first-child{
position:absolute!Important
}.tweet-container div:last-child{
position:relative!Important
}

Crypto to Bounce Back Strongly from FTX Crisis

According to the blockchain analytics firm, FTX was a far lesser player in the cryptocurrency market than Mt. Gox was at the time, and the market should recover much more strongly than before.

As Jardine points out, DEXs like Uniswap and Curve controlled roughly half of all exchange inflows by late 2022. Whereas in 2014, when Mt. Gox crumbled, CEXs were the only players in the marketplace. However, as Jardine explains, FTX was steadily gaining market share while Mt. Gox was steadily losing it, and this highlights the need for analyzing market trends in business.

Despite this, Jardine determined that before its collapse eight years ago, Mt. Gox was a more important component of the crypto ecosystem than FTX was. This is because it was a keystone of the CEX category in an era when CEXes dominated.

Further, Jardine analyzes the cryptocurrency industry’s resurgence following Mt. Gox’s collapse, finding that on-chain transaction volume remained unchanged for a year or so but eventually jumped back up.

On the Flipside

  • Mt. Gox lost 850,000 BTC in a cyberattack in February 2014, prompting the exchange to halt trading, take down its website, and seek bankruptcy protection.
  • Although victims are yet to receive their money back eight years later, the Mt. Gox Trustee said on October 6 that victims had until January 10, 2023, to pick a payment mechanism for the 150,000 BTC reportedly in their possession.
  • The ultimate fate of the FTX implosion victims remains to be seen.

Why You Should Care

Despite other factors, such as Sam Bankman-Fried’s high profile, Jardine believes that the comparison should give the industry optimism. When it comes to market fundamentals, there is no reason to believe that the industry won’t recover from this, “stronger than before.”

Read more on the FTX contagion:

SBF Outlines Leverage in Letter of Apology to FTX Staff

FTX Executives, Sam Bankman-Fried, and His Parents Bought Bahamas Real Estate Worth Millions

See original on DailyCoin

Chainalysis: FTX Crisis Comparatively Smaller Than Mt. Gox’s

Related Articles

image

Our Apps


DOWNLOAD APP

App store

Investing.com

(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

image