In May 2022, the Terra ecosystem suffered from a massive crash and even now, its impact has lingered with the entire crypto industry.
However, several months after the crash, the majority of the cryptocurrency industry had started to recover. Just when it seemed that things were indeed getting on the right track, the FTX incident happened.
As a result, the entire cryptocurrency industry’s recovery was badly interrupted. To some extent, the crypto market’s overall recovery was restarted.
This means that the industry would need even more time to recover from the downtrend. As per many market analysts, the crypto market may not survive the downtrend.
They believe that the cryptocurrency industry may plunge to the very bottom with no hopes of recovery.
Two Points of View by Market Analysts
Due to the recent market downfall, two sides have been formed among the analysts who are making their predictions about the cryptocurrency market recovery.
According to the first group of analysts, the cryptocurrency industry may find it too difficult to recover from the current situation.
Although the industry would endure the impact it will take a tremendous amount of time for it to get back on its feet.
Then there is the second group of analysts who are of the view that the cryptocurrency industry would recover sooner than expected. The industry may bounce back very quickly from the current downtrend.
Comparison Shared by Chainalysis
Chainalysis, a crypto analytics firm is among the market observers who are optimistic about the quick recovery of the crypto industry.
The firm has recently issued a report where it has run a comparison between the collapse of the FTX exchange and Mt.Gox.
The firm has claimed that the crash of the FTX exchange is not the first major and catastrophic incident that the cryptocurrency industry has suffered.
The cryptocurrency industry has suffered a similar catastrophic impact because of the demise of a major cryptocurrency exchange.
Mt.Gox’s Collapse
As per Chainalysis assessment, Mt.Gox was the cryptocurrency exchange with the biggest collapse in the history of cryptocurrency exchanges.
It was the first-ever cryptocurrency exchange that was offering Bitcoin but it ended up facing a major collapse in February 2014. The collapse took place as the exchange was exploited by hackers.
Due to the hack, the hackers were able to steal a tremendous amount of Bitcoin from the exchange. As per figures, the hackers were able to get their hands on a total of 750,000 Bitcoin.
This volume is equal to 6% of the overall supply of Bitcoin in the cryptocurrency industry.
The collapse of Mt.Gox also triggered a contagion but despite that, the cryptocurrency industry was able to survive.
It is worth mentioning that the Mt.Gox exchange’s influence on the overall cryptocurrency industry was much higher than the FTX exchange.
Comparison of Market Dominance
In terms of dominance, the FTX exchange was observed 13% of the industry’s total inflow while Mt.Gox was observed at 46%.
Despite having a larger market share and facing a demise, the cryptocurrency industry was able to survive. After Mt.Gox’s demise, it was noticed that the crypto industry became even stronger.
Many reforms and security measures were taken to improve the safety and security of the crypto industry. Therefore, the collapse of the FTX exchange is going to prove very beneficial for the overall crypto industry.