If FTX is causing new lows in the Bitcoin (BTC) bear market, BTC price action has to fall further to match Mt. Gox.
Data from on-chain analytics firm Glassnode confirms that the “Mt. Gox bear market” of nearly a decade ago is still above the 2022 lows.
FTX vs. Mt. Gox: Same, Same But Different
With the aftermath of the FTX bankruptcy scandal still unfolding, questions remain about how many major cryptocurrency entities will be affected and how big the industry’s losses will be.
The BTC/USD pair fell more than 25% last week as the ramifications became known and has failed to regain much of the lost ground.
At the same time, they have emerged multiple comparisons to Mt. Gox: alleged mismanagement, poor security, and insider trading have been cited as examples.
However, the raw data reveals some interesting additional figures to consider.
Mt. Gox imploded as a result of a gigantic 840,000 BTC hack in February 2014. Just months earlier, Bitcoin had reached a new all-time high of around $1,100, and Mt. Gox was handling around 70% of all trading activity.
In the months that followed, Bitcoin lost up to 85% of its value from that peak, bottoming out in January 2015, nearly a year after the hack.
This cycle became the first large-scale Bitcoin bear market witnessed by hodlers, and it took until December 2017 for another all-time high to emerge.
Fast forward to 2022, and at its recent two-year lows, the BTC/USD pair is down 77% in just under a year from its last all-time highs of $69,000.
With the similar time frames between FTX and Mt. Gox, the question facing analysts is whether BTC’s price action will add another 10% to its drawdown compared to its previous peak or worse.
As Cointelegraph reported, predictions for a return to $10,000 were already underway even before the FTX episode. The black swan crash, others warned, has set the cryptocurrency industry back several years.
What’s in a $400 million liquidation?
Comparing the FTX to a similar black swan event from almost ten years ago may seem out of place. However, the figures involved are eerily similar in some respects.
Mt. Gox lost 840,000 BTC, worth about $460 million. Before I fall FTX had a balance of 20,000 Bitcoins, according to data from on-chain analytics platform CryptoQuant, also worth just over $400 million.
However, as a fraction of market capitalization, this year’s losses pale in comparison to the 2014 plunge.
Bitcoin’s market capitalization at the beginning of March 2014 was $6.9 billion, up from $320 billion today.. The global cryptocurrency market capitalization is today at $834 billion, CoinMarketCap data confirms.
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