Recognized losses from FTX collapse peaked at $9B, far below earlier crises

Blockchain analytics firm Chainalysis has tried to place the FTX collapse into perspective — evaluating peak weekly-recognized losses within the wake from the exchange’s collapse when compared with previous major crypto collapses in 2022.

The 12 ,. 14 report found the depegging of Terra USD (UST) in May saw weekly-recognized losses peak at $20.5 billion, while the subsequent collapse of Three Arrows Capital and Celsius in June saw weekly-recognized losses peak at $33 billion. 

Compared, weekly recognized losses throughout the FTX saga peaked at $9 billion within the week beginning November. 7, and also have been reducing weekly since. 

Chainalysis stated the information shows that when the FTX debacle required devote November, investors happen to be hit using the “heaviest” crypto occasions this season.

“The data […] shows that as of this moment, the most heavy hitting [crypto] occasions were already behind investors when the FTX debacle required place.”

The analytics firm calculated total recognized losses by searching at personal wallets and calculating the need for assets because they were acquired and subtracting the need for these assets at that time these were sent elsewhere.

However, the information can always have overestimated recognized losses, because it counted any movement in one wallet to a different like a purchase event. Chainalysis aalso noted the chart doesn’t take other statistics into consideration, for example user funds stored on FTX’s exchange that are frozen.

“We can’t think that any cryptocurrency sent from the given wallet is always likely to be liquidated, so consider these figures being an upper bound for recognized gains of the given wallet,” it described.

Related: Was nov FTX really crypto’s ‘Lehman moment?’

While Chainalysis’ data covers recognized losses, on-chain analytics platform CryptoQuant lately shared data about how internet unrealized losses for Bitcoin (BTC) was impacted following a FTX collapse. 

It found that unrealized losses for BTC maxed at -31.7% following a FTX collapse when compared to collapse of 3AC/Celsius and Terra Luna, which only peaked at -19.4%.

Internet unrealized profit/loss for Bitcoin. Source CryptoQuant.

Analytics data firm Glassnode also highlighted our prime degree of unrealized losses following a FTX collapse inside a November. 17 tweet, evaluating it to the top level of -36% seen throughout the 2018 bear market.

Increases or losses connected by having an investment are thought unrealized up to the reality that an investment is offered. The action of selling “realizes” these losses or gains. Unrealizes losses can also be known as paper losses.

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