Crypto Survived Worse Than FTX's Fall: Chainalysis

According to Chainalysis, the fall of FTX is likely to have a relatively lesser effect on the crypto ecosystem than the demise of Mt. Gox. < /p> New

Blockchain analytics firm Chainalysis compared the fall of Mt. Gox to FTX to determine the impact of FTX's bankruptcy on the ecosystem.

He concluded that FTX was a relatively smaller part of the crypto industry than Mt. Gox at the time and that the industry should rebound stronger than ever.

In a November 23 Twitter thread, Eric Jardine, Head of Research at Chainalysis, began his comparison by first looking at the two companies' market share, finding that Mt. Gox averaged 46% of all exchange flows in the year before its collapse in 2014, compared to FTX's 13% average, which ran from 2019 to 2022.

Jardine notes in 2014 when Mt. Gox collapsed that centralized exchanges (CEX) were the only players in the game, while by the end of 2022 almost half of all exchange were captured by decentralized exchanges (DEXs) such as Uniswap and Curve.

CEX exchange flow vs. DEX between 2013 through 2022. Source: Chainalysis

Jardine however mentions that FTX was slowly gaining market share while Mt. Gox saw theirs steadily decline, and the trade trajectories are worth worth considering, adding:

“Mt. Gox was becoming just one exchange during a period of growth for the category, taking a smaller slice of a bigger pie. FTX, on the other hand, was taking a bigger slice of a falling cake, beating other exchanges even as its gross tx volume dwindled.”

Despite this, Jardine concluded that Mt. Gox was a “CEX category mainstay at a time when CEX was dominant,” making it a more important part of the crypto ecosystem at the time of its collapse than. ..