Crypto Survived MtGox and it Will Survive FTX: Chainalysis
On Nov. 24, analytics firm Chainalysis made the Mt.Gox comparison as it was not the first time the crypto world has been shaken due to an exchange demise. Mt.Gox was the first Bitcoin exchange, but it collapsed in February 2014. Crypto survived and thrived, and it will do so again despite all the mainstream media FUD. The Japan-based exchange was hacked in early 2014, resulting in the loss of around 750K BTC, or 6% of the entire supply at the time. Mt.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 inflows compared to 13%. Chainalysis said that objectively, Mt.Gox was a bigger industry player which is good because its collapse didn’t destroy crypto. One difference is that Mt.Gox’s market share was in decline, whereas FTX’s was increasing. This may mean that the FTX collapse was a bigger psychological blow to confidence. Furthermore, crypto services were limited to a handful of exchanges back in 2014, whereas it is much more diverse now, with DEXes capturing almost half of all exchange flows in late 2022. Following the collapse eight years ago, on-chain transaction volume stagnated for around a year but soon returned and doubled pre-Mt.Gox levels. This time around, crypto investors have been moving assets off exchanges to self-custody.