Chainalysis, a blockchain analysis company, compared FTX’s bankruptcy to the collapse of Mt. Gox to assess how it will affect the ecosystem.
It came to the conclusion that FTX represented a relatively smaller portion of the cryptocurrency market than Mt. Gox did at the time and that the market would recover more powerfully than ever.
Eric Jardine, research lead at Chainalysis, first compared the market shares of the two companies in a thread on Twitter on November 23. He discovered that Mt. Gox averaged 46% of all exchange inflows in the year before its 2014 collapse, compared to FTX’s average of 13%, which ran from 2019 to 2022.
When Mt. Gox collapsed in 2014, centralised exchanges (CEXes) were the only players in the market, according to Jardine. By late 2022, however, decentralised exchanges (DEXes), like Uniswap and Curve, had captured nearly half of all exchange inflows.
“Mt. Gox was becoming one exchange among many during a period of growth for the category, taking a smaller share of a bigger pie. FTX on the other hand was taking a bigger share of a shrinking pie, beating out other exchanges even as its raw tx volume declined,” Jardine stated.
The comparison, in Jardine’s opinion, “should give the industry optimism,” as when it comes down to market fundamentals, “there’s no reason to think the industry can’t bounce back from this, stronger than ever,” despite the existence of other factors such as Sam Bankman-prominent Fried’s public profile.
(With insights from Cointelegraph)
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