The blockchain analysis firm Chainalysis has recently announced the demise of crypto exchange ftx compared to another pitch-black page in the history of the crypto industry: Mt. Gox. In this way, Chainalysis tried to gain insight into the way in which the crypto ecosystem could possibly recover.
Bitcoin Exchange Hack Mt. Gox was many times worse
Chainalysis actually quickly comes to the conclusion that it is Mt. Gox debacle was many times worse than FTX’s recent bankruptcy. Mt. Gox was also an exchange that already died in 2014. The big difference between Mt. Gox and FTX, according to Chainalysis, the fact that Mt. Gox was a lot bigger at the time than FTX has ever been.
1/ Big picture: FTX’s collapse has shaken the #crypto market. But this is not the first time crypto has faced significant turmoil related to the collapse of an exchange.
— Chainalysis (@chainalysis) November 23, 2022
Mt. Gox was responsible for no less than 46% of all inflows which the year prior to the abrupt end of the exchange took place. This while FTX was only responsible for 13% of the total inflows according to Chainalysis. The effects of the FTX drama will of course also be a lot smaller, according to Chainalysis.
In addition, centralized exchanges (CEX), such as FTX, Mt. Gox, and Binance, held a much larger share of the market in 2014 than they do now. Today, decentralized exchanges (DEX) are major players in the market. About half of all inflows now take place on DEXs. That means that the downfall of a CEX, such as FTX, is a lot less difficult, says Chainalysis.
The market is coming back stronger than ever
Research at Chainalysis Eric Jardine did state that Mt. Gox was falling, while FTX’s market share continued to increase.
“Mt. Gox became one exchange among many during a period of growth for the category, taking a smaller slice of a larger pie. FTX, on the other hand, took a bigger slice of a shrinking pie, beating other exchanges even as its raw tx volume declined.”
The research concludes that while the demise of FTX is obviously a major setback for the entire industry, there is really no reason to believe that the entire ecosystem will not come back stronger than before. The comparison between Mt. Gox and FTX should provide optimism, according to Chainalysis.