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Crypto survives MtGox and it will survive FTX: Chainalysis

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On November 24, analytics firm Chainalysis drew comparisons to Mt.Gox, as this isn’t the first time the crypto world has been rocked by the exchange’s downfall.

Mt.Gox was the first bitcoin exchange, but it collapsed in February 2014. Crypto survived and thrived, and it will again despite all the mainstream media FUD.

The Japan-based exchange was hacked in early 2014, resulting in the loss of approximately 750,000 BTC, or 6% of its total supply at the time.

Mount Gox vs. FTX

When comparing the two, it should be noted that Mt.Gox had a larger market share than FTX, with 46% of exchange flows compared to 13%.

Chain analysis told Objectively, Mt.Gox was a big player in the industry, which is good because the collapse didn’t destroy crypto.

One difference is that Mt Gox’s market share decreased while FTX’s increased. This could mean that the collapse of FTX was a huge psychological blow to the faith.

Furthermore, crypto services were limited to a handful of exchanges in 2014, while it is now much more diverse, with dexes accounting for nearly half of all exchange flows by the end of 2022.

After the collapse eight years ago, on-chain transaction volume stagnated for about a year, but quickly recovered and pre-MT.Gox levels doubled. This time around, crypto investors are moving assets from exchanges into self-custody.

“This comparison should make the industry optimistic. Mt. Gox was a bigger part of the crypto ecosystem when it collapsed in 2014 than FTX, and while the impact on the market was worse, it recovered relatively quickly.

Another factor was that SBF was considered one of the leading faces of crypto. But as traders and investors have painfully learned, putting all your trust in a centralized system controlled by one person can be a very bad idea.

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In addition, crypto is diluted with loans and leverage, which hits the house of cards when the collateral is questionable, which was the case with FTX.

Chainalysis concluded that the crypto industry survived the collapse of FTX worse, so “there’s no reason why it can’t come out of this stronger than ever.”

outlook on the crypto market

It has recovered $44 billion in total market cap since the bear cycle low earlier this week. The market is up 3% that day and the total cap is now $865 billion, but it’s still in deep bear territory.

Bitcoin price was up 2.3% to $16,564, and Ethereum was up 4.6% to trade at $1,184 at the time of writing.

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source: cryptopotato.com

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