What Mt.  Gox’s example tells us about crypto’s future after FTX

What Mt. Gox’s example tells us about crypto’s future after FTX

  • The aftermath of the Mt.Gox collapse seems to suggest that the crypto space would make a comeback
  • However, recent BTC transfers raise the question of the possibility of the FTX saga dragging on

The impact of the ongoing FTX episode is still felt, although it is unclear to what extent. However, new chain light research suggests that it may not be as important as Mt. Gox scandal. Parallels between the FTX and Mt.Gox collapses were drawn in a recent analysis by Chainalysis. And the conclusion is that the crypto sector is far from ending.

FTX-Mt.Gox – Compare and Contrast

One of Chainalysis’ top researchers, Eric Jardine, has proposed that we could learn more about the crypto industry’s potential for resilience by comparing Mt. Gox collapse in 2014 with the FTX collapse in 2022.

In the year before its 2014 collapse, Mt. Gox took in an average of 46% of all IPOs, while FTX, which was active from 2019 to 2022, took an average of 13%.

Source: Chainalysis

Centralized exchanges such as Mt. Gox was crucial in the early days of cryptocurrency. However, decentralized exchanges (DEXs) present a new challenge to CEXs in the current dispensation. These latter entities not only compete with CEXs for market share, but also offer services not available through CEXs. Hence their appeal.

As a “lynchpin in the CEX category at a time when CEXs ruled,” Mt. Gox a bigger role in the crypto ecosystem than FTX did before its demise.

Source: Chainalysis

Mt. Gox saga continues…

Coincidentally, a crypto wallet linked to the BTC-e exchange that has been linked to Mt. Gox breach of 2014, live on Wednesday with its largest transaction since August 2017.

The payment history showed that the wallet transferred 10,000 BTCs, worth approximately $165 million, to two anonymous addresses. A wallet that sent 3500 BTC sent 300 BTC to another address as part of the same transaction. It was redistributed to several wallets that could not be linked to a single custody service.

Hope for the crypto space?

After all these years, customers of the defunct Mt. Gox exchange still hasn’t received its money. The last episode proves that the story is far from over. It is because of this that the FTX collapse becomes an even more curious case. Is it likely that we will see same thing happen again when people don’t get access to their money and the case takes years?

We will know what to expect when more information and developments become available. However, the latest data from Chainalysis suggests that the crypto industry will recover and continue to thrive.

In fact, the aforementioned report found a decline in transaction volume after the collapse of 2014. However, in the months that followed, consumer and business confidence returned to pre-crisis levels and transaction volume doubled.

Leave a Reply

Your email address will not be published. Required fields are marked *