Data from on-chain analytics firm Glassnode confirms that the “Mt. Gox bear market” from nearly a decade ago is still beating its 2022 lows.
FTX vs Mount Gox: Same but different
As the fallout from the FTX bankruptcy scandal continues, questions remain as to how many major crypto entities will be affected and how large industrial losses will be affected.
BTC/USD fell more than 25% last week as the repercussions became known and failed to recover much of the losses.
At the same time, multiple comparisons with Mt. Gox: Alleged mismanagement, poor security, and insider trading activity were cited as examples.
However, the raw data reveals some interesting additional numbers to consider.
Gox mountain exploded as a result of a giant 840,000 BTC hack in February 2014. Just months ago, Bitcoin experienced a new all-time high of around $1,100, with Mt.Gox handling about 70% of all trading activity.
In the months that followed, Bitcoin lost up to 85% of its value against that rally, which bottomed out in January 2015 — almost a year after the breakout.
This cycle became the first Bitcoin bear market witnessed by large-scale traders, and it took until December 2017 for another all-time high to appear.
Fast forward to 2022, and at recent two-year lows, BTC/USD is down 77% in just under a year against its latest all-time high of $69,000.
With similar timeframes between FTX and Mt Gox, the question facing analysts is whether BTC price action will add another 10% to its decline against its previous peak – or worse.
As Cointelegraph reported, calls for a return of $10,000 had already been there even before the FTX episode. Meanwhile, others warn that the Black Swan bankruptcy has set the cryptocurrency industry back several years.
BTC/USD% has fallen off the chart to an all-time high. Source: Glassnode
What’s in wiping out $400 million?
Comparing FTX to a similar Black Swan event from nearly ten years ago might seem out of place. However, the numbers in question are eerily similar in some ways.
Related: Bitcoin Will Ignore FTX’s ‘Black Swan’ Just Like Mt. Gox
Mt.Gox lost 840,000 BTC, worth around $460 million at the time. Before the plunge, FTX had a Bitcoin balance of 20,000, according to data from on-chain analytics platform CryptoQuant — worth just over $400 million.
However, as a fraction of the market cap, 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 total cryptocurrency market cap today is $834 billion, data from CoinMarketCap confirms.