Analyst firm Chainalysis compared the fall of Mt.Gox to FTX to determine how the FTX bankruptcy would impact 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 bounce back stronger than ever.
In a Nov. 23 Twitter thread, Chainalysis lead researcher Eric Jardine began his comparison by first looking at the market share of the two firms and found that Mt. 2014, compared to an FTX average of 13% that ran from 2019 to 2022.
Jardine notes that in 2014, when Mt.Gox collapsed, centralized exchanges (CEXs) were the only players in the game, while at the end of 2022, nearly half of all exchange inflows were taken over by decentralized exchanges (DEXs) such as Uniswap and curve.
Exchange inflows of CEX versus DEX between 2013 and 2022. Source: Chainalysis.
Jardine, however, notes that FTX has been slowly gaining market share while Mt.Gox has steadily declined, and that the business trajectories are noteworthy, adding:
“Mountain. Gox has become one of many exchanges during the growth of the category, taking a smaller share of a larger pie. On the other hand, FTX has been taking a large share of the shrinking pie, outperforming other exchanges, even as the volume of outstanding transactions has declined.”
Despite this, Jardine concluded that Mt.Gox was “the linchpin of the CEX category at a time when CEX dominated,” making it more of a part of the crypto ecosystem at the time of its collapse than FTX.
Jardine then investigates the recovery of the crypto industry after the fall of Mt.Gox and found that while the network’s transaction volume remained stagnant for a year or so, activity soon recovered.
Related: Sam Bankman-Fried says he ‘deeply regrets’ crash in letter to FTX team
In February 2014, Mt.Gox suspended trading, shut down its website, and filed for bankruptcy protection after losing 850,000 bitcoins (BTC) in a hack.
Customers who had deposits on the exchange have still not received their funds back, but trustee Mt.Gox announced on Oct. 6 that lenders have until Jan. 10, 2023 to choose a method to repay the 150,000 BTC reportedly in their disposal. .
Monthly influx of crypto services before and after the Mt.Gox crash. Source: Chain Analysis
Jardine believes that while there are other factors, such as Sam Bankman-Fried’s wide public presence, “the comparison should instill optimism in the industry” because when it comes down to market fundamentals, “there’s no reason to think the industry can’t come into yourself.” stronger than ever.”