Mt. Gox, once the largest cryptocurrency exchange, collapsed last year, but Chainalysis estimates that FTX's fall will have a relatively smaller impact on the crypto ecosystem. To determine the potential ecosystem impact of FTX bankruptcy, Chainalysis compared the fall of Mt.
Gox with the fall of FTX. In an analysis of FTX, it was concluded that the crypto industry should recover stronger than ever after Mt. Gox disappeared. Based on a comparison of the two companies and their market share, Chainalysis Research Manager Eric Jardine discovered that Mt.
As compared to FTX's average of 13%, which occurred between 2019 and 2022, Gox averaged 46% of all exchange inflows in 2014, which led to its collapse. Mark Karpelès, the founder of the defunct Mt. Gox exchange that carried 70% of bitcoin turnover between 2010 and 2013, is suspected of falsifying data in its balance sheets.
During trading, 100,000 bitcoins were stolen from investors by manipulating algorithms on the exchange. Decentralized exchanges such as Uniswap and Curve, which were capturing nearly half of all exchange inflows by the end of 2022, were the only players when Mt.
Gox was launched in February 2014.
FTX vs. Mt. Gox: A comparison that gives the industry optimism
While Mt. Gox's market share has steadily declined, Jardine points out that FTX has slowly gained market share. It is important to consider FTX's business trajectory moving forward.
“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 concluded that at the time of its collapse, Mt. Gox was "the chief of the CEX category during a time when CEXs were dominant." After losing 850,000 bitcoins in February 2014, Mt. Gox suspended trading, shut down its website, and filed for bankruptcy protection.
There have still been no refunds to buyers who had deposits on the Mt. Goxa stock exchange. However, creditors have until January 10, 2023 to choose a payment method for the 150,000 BTC they claim to hold. Jardine also believes that while there are other factors such as Sam Bankman-Fried's huge public presence, "this comparison should give the industry optimism" because when it comes down to market fundamentals, “There’s no reason to think the industry can’t bounce back from this, stronger than ever”.