Data: FTX crash won’t have a major impact on the market

Last Updated on 47 mins by cryptoevent

According to blockchain analysis firm Chainalysis, the crash of the now infamous crypto exchange FTX is not the worst the cryptocurrency industry has faced. Comparing FTX to the case of Mt. Gox, the company believes that the impact of FTX will be less than that of Mt. Gox, which was the only mainstream cryptocurrency exchange at the time.

In a Twitter thread, Chainalysis research lead Eric Jardine explained that Mt. Gox’s market share, trading volume and overall influence on the market had much more impact on the industry than FTX. According to his research, Mt. Gox accounted for an average of 46% of foreign exchange inflows in the year after it crashed in 2014.

The impact of FTX on the market is reduced even further as the market now has decentralized exchanges in the industry. These exchanges account for nearly half of the inflows in the market. In his thread, Jardine goes on to note that FTX was gaining more volume in the market at the time of the crash. Mt. Gox was falling while other players were entering the market.”

Mt. Gox became one exchange among many during a period of growth for the category, taking a smaller slice of a larger pie. FTX, on the other hand, took a larger share of a shrinking pie, beating other exchanges even as its raw Tx volume declined.”

In Jardine’s estimation, the FTX crash is unlikely to have that much of an impact on the market and if it does, it will recover. Looking at the data following the 2014 Mt. Gox crash, Jardine noted that transaction volume in the industry was stagnant for some time, but activity was picking up.

The Post Data: FTX crash will not have a major impact on the market appeared first on Coin Insider.

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