If FTX triggers a new Bitcoin (BTC) bottom of the bear market, BTC price action needs to drop further to match Mt. Gox.
Data from on-chain analytics firm Glassnode confirmed that the “Mt. Gox bear market nearly a decade ago is still beating 2022 lows.
FTX vs. Mt. Gox: Same, Same But Different
With the fallout from the FTX Bankruptcy Scandal Still ongoing, questions remain as to how many major crypto entities will be affected and the extent of industry losses.
BTC/USD fell over 25% last week as the ramifications became known and failed to regain much lost ground.
At the same time, multiple comparisons to Mt. Gox have emerged: Alleged mismanagement, poor security and insider trading activities were all cited as examples.
The raw data, however, reveals some additional numbers worth keeping in mind.
Mt. Gox imploded following a giant hack of 840,000 BTC in February 2014. A few months prior, Bitcoin hit a new all-time high of around $1,100, with Mt. Gox handling around 70% of all trading activity .
In the months that followed, Bitcoin lost up to 85% of its value from that peak, hitting a low in January 2015, nearly a year after the hack.
This cycle became the first large-scale Bitcoin bear market seen by hodlers, and it took until December 2017 for another all-time high to appear.
Fast forward to 2022, and at its recent two-year lows, BTC/USD is down 77% in just under a year from its most recent all-time highs of $69,000.
With similar timeframes between FTX and Mt. Gox, the question facing analysts is whether BTC’s price action will add another 10% to its decline from its previous peak — or worse. .
As Cointelegraph reported, calls for a return to $10,000 were already in place even before the FTX episode. The black swan bankruptcy, others have warned, has, meanwhile, set the crypto industry back years.
What’s in a $400 million wipeout?
Comparing FTX to a similar black swan event from nearly a decade ago might seem out of place. However, the numbers involved are eerily similar in some ways.
Mt. Gox lost 840,000 BTC, worth at the time around $460 million. Before going down, FTX had a Bitcoin balance of 20,000, according to data from on-chain analytics platform CryptoQuant, which is also worth just over $400 million.
As a fraction of market cap, however, this year’s losses pale in comparison to 2014’s decline.
Bitcoin’s market capitalization at the beginning of March 2014 was $6.9 billion, compared to $320 billion today. The overall crypto market capitalization today is $834 billion, according to data from CoinMarketCap confirmed.
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