Realized losses from FTX collapse peaked at $9B, far beneath earlier crises


Blockchain analytics agency Chainalysis has tried to place the FTX collapse into perspective — evaluating peak weekly-realized losses within the wake of the trade’s collapse in comparison with earlier main crypto collapses in 2022.

The Dec. 14 report discovered the depegging of Terra USD (UST) in Might noticed weekly-realized losses peak at $20.5 billion, whereas the subsequent collapse of Three Arrows Capital and Celsius in June noticed weekly-realized losses peak at $33 billion. 

As compared, weekly realized losses through the FTX saga peaked at $9 billion within the week beginning Nov. 7, and have been lowering weekly since. 

Chainalysis stated the info means that by the point the FTX debacle befell in November, buyers have already been hit with the “heaviest” crypto occasions this yr.

“The info […] means that as of now, the heaviest hitting [crypto] occasions had been already behind buyers by the point the FTX debacle befell.”

The analytics agency calculated whole realized losses by private wallets and measuring the worth of belongings as they had been acquired and subtracting the worth of those belongings on the time they had been despatched elsewhere.

Nonetheless, the info should still have overestimated realized losses, because it counted any motion from one pockets to a different as a sale occasion. Chainalysis aalso famous that the chart doesn’t take different statistics into consideration, resembling consumer funds saved on FTX’s trade that are frozen.

“We will’t assume that any cryptocurrency despatched from a given pockets is essentially going to be liquidated, so consider these numbers as an higher sure for realized features of a given pockets,” it defined.

Associated: Was the autumn of FTX actually crypto’s ‘Lehman second?’

Whereas Chainalysis’ knowledge covers realized losses, on-chain analytics platform CryptoQuant just lately shared knowledge on how internet unrealized losses for Bitcoin (BTC) was impacted following the FTX collapse. 

It discovered that unrealized losses for BTC maxed at -31.7% following the FTX collapse in comparison with the collapse of 3AC/Celsius and Terra Luna, which solely peaked at -19.4%.

Web unrealized revenue/loss for Bitcoin. Supply CryptoQuant.

Analytics knowledge agency Glassnode additionally highlighted the excessive stage of unrealized losses following the FTX collapse in a Nov. 17 tweet, evaluating it to the height of -36% seen through the 2018 bear market.

The features or losses related to an funding are thought-about unrealized up till the purpose that the funding is offered. The act of promoting “realizes” these losses or features. Unrealizes losses are also called paper losses.

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