Updated on January 9, 2023 12:51 PM
Chainalysis concluded that FTX represented a comparatively lesser portion of the cryptocurrency market than Mt. Gox did at the time and that the market will 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.
However, Jardine said that company trajectories are essential to take into account and that FTX was progressively increasing its market share while Mt. Gox was seeing a steady drop. In a time of expansion for the market, he said that Mt. Gox was but one exchange among many, taking a smaller piece of a larger pie. In contrast, FTX was outperforming rival exchanges while also capturing a more significant portion of a pie that was getting smaller.
When Mt. Gox failed in 2014, Jardine observed that centralized exchanges (CEXs) were the only competitors. Decentralized exchanges (DEXs), such as Uniswap and Curve, were in charge of approximately half of all exchange inflows as of late 2022.
Nevertheless, Jardine came to the conclusion that Mt. Gox was a "linchpin of the CEX category at a time when CEXs dominated," making it a more significant component of the crypto environment at the time of its fall than FTX.
The revival of the cryptocurrency market following the collapse of Mt. Gox is then examined by Jardine, who discovered that although activity quickly resumed after a year or so of stagnation in on-chain transaction volume.
After losing 850,000 Bitcoin in a cyberattack in February 2014, Mt. Gox stopped trading, shut down its website, and requested bankruptcy protection. Customers who put holdings on the exchange have yet to receive their money back. However, the Mt. Gox Trustee declared on October 6 that creditors had until January 10, 2023, to choose a form of payment for the allegedly held 150,000 BTC.
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-Fried's public profile.