The FTX Bitcoin vault is worth the equivalent of 840,000 BTC of Mt. Gox before being hacked

If FTX is making new lows in the Bitcoin bear market, then BTC price action will fall even further to the level seen during the Mt.Gox crash.

Data from on-chain analytics firm Glassnode confirms the “Mt. Gox” almost a decade ago is still well below the 2022 low.

FTX and Mt.Gox: Similar but very different

With the fallout from the FTX bankruptcy scandal still spreading, it remains unclear how many major crypto entities will be affected and how much damage to the industry will be.

BTC dropped more than 25% in the week before the incident and has not yet fully recovered.

At the same time, there have been many tweets comparing FTX to Mt. Gox: allegations of mismanagement, poor security and insider trading are all cited.

However, the data reveals some other interesting numbers to keep in mind.

Mt.Gox collapsed due to a massive 840,000 BTC hack in February 2014. Just a few months ago, Bitcoin hit a new all-time high (ATH) around $1,100, where Mt.Gox handles around 70% of all trading activity.

In the months that followed, Bitcoin lost as much as 85% of its value from its peak, bottoming out in January 2015 — almost a year after the hack.

This cycle became the first Bitcoin bear market that holders witnessed on a large scale, and it was not until December 2017 that another ATH was recorded.

Fast-forward to 2022 and the price is at a recent 2-year low, BTC has dropped 77% in less than a year reaching its latest ATH of $69,000.

With similar timeframes between FTX and Mt. Gox, the question analysts must address is whether BTC price action is down another 10% from the previous peak or even worse?

There were many $10,000 price predictions made even before FTX failed. Meanwhile, this black swan bankruptcy has set the crypto industry back several years as the CEO of Binance has warned.

BTC Drop Rate From All Time Highs
BTC Drop Rate From All Time Highs | Source: Glassnode

What’s in a $400 million write-off?

Comparing FTX to a similar black swan event from nearly 10 years ago seems inappropriate. However, the numbers involved are eerily similar in some respects.

Mt.Gox lost 840,000 BTC, worth at the time about $460 million. Prior to the shutdown, FTX had a Bitcoin balance of 20,000, according to data from on-chain analytics platform CryptoQuant — also worth more than $400 million.

However, as it represents only a small fraction of market capitalization, this year’s loss is insignificant compared to the 2014 drop.

FTX Bitcoin Reserve Chart
FTX Bitcoin Reserve Chart | Source: CryptoQuant

The market capitalization of Bitcoin at the beginning of March 2014 was $6.9 billion compared to $320 billion today. The total cryptocurrency market cap is now $834 billion, data from CoinMarketCap confirms.

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