Chinalysis: The cryptocurrency industry has survived worse than the FTX crisis

چین‌آلیسیس: صنعت ارزهای دیجیتال در شرایط بدتر از بحران FTX دوام آورده‌ است

The collapse of the FTX exchange this year is very similar to the bankruptcy of the Matt Gax exchange in 2014. For this reason, the blockchain analysis company ChainAlysis compared the crisis created by these two exchanges to determine how the FTX bankruptcy will affect the digital currency ecosystem.

To Report Cointelegraph’s ChinaAlysis concluded that FTX represented a smaller portion of the cryptocurrency industry than Matt Gox at the time; As a result, the industry should bounce back stronger than ever.

On November 23, Eric Jardine, the senior researcher of ChinaAlysis, started his comparison by looking at the market share of these two companies. He found that Matt Gax accounted for an average of 46% of the total capital entering the exchanges in the year leading up to its fall, 2014 (2014); On the other hand, the share of FTX exchange, which operated from 2019 to 2022 (1398 to 1401), was only 13% of the total capital entering the exchanges.

Jardine noted that when Matt Gox collapsed in 2014, centralized exchanges were the only players in the game. While at the end of 2022, almost half of the total capital inflows to the exchanges are held by decentralized exchanges such as Uniswap and Cru.

ChinaAnalysis: The cryptocurrency industry has survived worse than the FTX crisis
Capital inflows to centralized exchanges compared to decentralized exchanges (2013 to 2022)

Jardine notes that FTX’s market share has been increasing; While the market share of Matt Gox is constantly decreasing. In addition, the trajectory of businesses is also worth considering. He adds:

During the period of market growth, Matt Gox was losing its share against other exchanges and had a smaller share of the market. In contrast, FTX captured a larger share of the shrinking market, beating other exchanges even as net transaction volume declined.

Still, Jardine concluded that in an era when centralized exchanges dominated the market, Matt Gox was one of the mainstays of the category. This made MetGax a bigger part of the cryptocurrency ecosystem than FTX at the time of the collapse.

Next, Jardine looked at how the cryptocurrency industry has recovered since the fall of Matt Gox. He found that after the collapse of the exchange, Anchain’s transaction volume stagnated for a year or more, but activity picked up again after this period.

In February 2014, the MetGax exchange suspended trading, closed its website and filed for bankruptcy protection after losing 850,000 bitcoins during a hack.

Customers who had assets deposited in this exchange have not yet received their funds back. However, trustee Matt Gax announced on October 6 that creditors have until January 10, 2023 to choose a repayment method for the 150,000 bitcoins reportedly held by the exchange.

ChinaAnalysis: The cryptocurrency industry has survived worse than the FTX crisis
Capital flow to the market before and after the collapse of the Matt Gax exchange

Jardine believes that while other factors, such as Sam Benkman Fried’s extensive social interactions, will be influential, the comparison should leave the industry optimistic about the future; Because if we summarize all this to the fundamentals of the market, there is no reason to think that the industry cannot come out of this crisis stronger than before.


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