The crypto industry has survived worse than the FTX crash

Blockchain analysis firm Chainalysis compared the bankruptcy of Mt. Gox with that of FTX to determine how FTX's bankruptcy would affect the crypto ecosystem.

Chainalysis concluded that with FTX’s relatively small share of the crypto industry compared to what Mt. Gox was at the time, the crypto industry should bounce back stronger than ever.

In a Nov. 23 Twitter thread , Eric Jardine, head of research at Chainalysis, made the comparison. He first looked at the market share of the two companies and found that Mt. Gox accounted for an average of all transactions in the year before the 2014 crash. 46% of inflows, compared to FTX’s average inflow of 13% over the period of its operations from 2019 to 2022.

Jardine pointed out that when Mt. Gox collapsed in 2014, centralized exchanges (CEX) were the only players in the game, and by the end of 2022, nearly half of all exchange inflows will be lost to decentralized exchanges such as Uniswap and Curve ( DEX) capture.

Comparison of exchange inflows between CEX and DEX from 2013 to 2022 Source: Chainalysis

However, Jardine mentioned that with TX's slowly increasing market share and Mt. Gox's steady decline, the business trajectory is worth considering, adding:

“Mt. Gox became one of many exchanges during the growth period of the category, with a smaller share of the larger pie. FTX, on the other hand, gradually took a larger share of the shrinking market, even Beating other exchanges while their raw trading volumes are down.”

Still, Jardine concluded that Mt. Gox “was key to the CEX category in an era of CEX dominance,” making it a larger part of the crypto ecosystem than FTX at the time of its collapse.

Jardine went on to examine the recovery of the crypto industry following the collapse of Mt. Gox and found that while on-chain transaction volumes stagnated for a year or so, activity quickly picked up.

In February 2014, Mt. Gox suspended trading, closed its website, and filed for bankruptcy protection after losing 850,000 bitcoins in a hack.

Customers who deposited assets at Mt. Gox still have not recovered their funds, but the Mt. Gox trustee announced on October 6 that creditors have until January 10, 2023, the latest deadline to pay for the 15 assets they allegedly hold. 10,000 bitcoins to choose a repayment method.

Jardine believes that while there are other factors to consider, such as Sam Bankman-Fried's enormous publicity , "this comparison should provide optimism for the industry" because when it comes down to market fundamentals, "there's no reason to think The crypto industry cannot bounce back from this event stronger than ever."