Realized losses of crypto investors after FTX’s bankruptcy peaked at $9 billion per week. That’s considerably less than the losses after Terra, Three Arrows Capital, and Celsius collapsed.
Analysts at Chainalysis compared the impact of FTX’s crash to previous major events of the same nature that occurred in 2022. According to their data, weekly realized losses peaked at $9 billion in the first week after FTX filed for bankruptcy. Since then, they’ve been declining. By comparison, weekly losses topped $20.5 billion after Terra collapsed in May. The subsequent bankruptcies of Three Arrows Capital and Celsius in June led to even larger realized losses, reaching $33 billion weekly.
Analysts conclude that “by the time the FTX debacle took place” in November, crypto investors had already experienced “the heaviest hitting events” of 2022. Chainalysis notes that the data presented may be somewhat inaccurate, as any movement of funds between addresses was considered a sale. On the other hand, the statistics didn’t take into account user funds blocked in FTX accounts.
Analysts from CryptoQuant shared data on unrealized losses of BTC investors, which surpassed similar figures of previous market turmoil after FTX’s collapse. The maximum value of unrealized losses among BTC holders after the crashes of 3AC, Celsius, and Terra was slightly higher than -19% at peak moments, while after the bankruptcy of SBF’s structures, this value reached -31.7%.
Data by CryptoQuant confirms information previously provided by Glassnode. They compared the level of unrealized losses of BTC holders after FTX’s crunch with a -36% peak value, which was observed during the crypto market’s fall in 2018. It’s worth noting that unrealized losses associated with investment assets are considered as such until a sale of the asset takes place, which “realizes” the financial losses.
The situation indirectly confirms Binance CEO Changpeng Zhao’s words stating that the industry has become healthier thanks to the collapses of FTX, Terra, 3AC, and Celsius and other events that made 2022 unpleasant. The entrepreneur keeps sticking to this view of market perturbations and considers the influence of the FUD effect on the liquidity outflow from Binance accounts to be a “stress test,” which would eventually prove the exchange’s solvency.
