Bitcoin will shrug off FTX ‘black swan’ just like Mt. Gox — analysis

Bitcoin (BTC), like other setbacks, will recover from FTX’s ‘black swan event’, according to trading team Stockmoney Lizards.

and Tweet On November 12, a popular commentator claimed that the week’s event was actually nothing new for Bitcoin.

FTX “Real Black Swan Event”

Despite dropping 25% in a matter of days, BTC/USD is not doomed as a result of the bankruptcies that have affected FTX, Alameda Research, and possibly other major cryptocurrency companies.

For Stockmoney Lizards, the unfolding, albeit abrupt, is not much different from the liquidity crisis early in Bitcoin’s history.

“We’ve actually seen the Black Swan event, the FTX bankruptcy.

“BTC’s history is lined with such events and the market will recover as it has in the past.”

The accompanying chart shows similar “black swan” moments in the past, dating back to the 2014 Mt. Gox hack.

Two other notable events are the hack of exchange Bitfinex in 2016 and the COVID-19 cross-market crash in March 2020.

BTC/USD annotated chart. Source: Stockmoney Lizards/ Twitter

As Cointelegraph reported, former FTX executive Zane Tackett even suggested copying the liquidity recovery plan by creating a token from when Bitfinex suffered a $70 million loss. FTX then filed for Chapter 11 bankruptcy in the United States.

The reaction included a candid assessment of the crypto industry, with Filbfilb, co-founder of trading suite Decentrader predicting a multi-year recovery process.

Binance CEO Changpeng Zhao, who was once planning to buy FTX, warned that the industry “went back several years ago.”

Exchange BT reserves near five-year low

On the other hand, the loss of user confidence is already manifested in the decline in exchange balances.

RELATED: Losing Hodler Holds 50% of BTC Supply After $5.7K Bitcoin Price Drop

According to data from on-chain analytics platform CryptoQuantBTC balances on major exchanges are now at their lowest since February 2018.

The CryptoQuant-tracked platform lost 35,000 BTC and 26,000 BTC on November 9th and 10th respectively. Both days were multi-month records, but did not exceed the June 17 single-day tally of 67,600 BTC.

Currency outflows continue to be monitored by industry analysts. among them I’m Maartunn, a CryptoQuant contributor.

Bitcoin exchange reserves chart. Source: CryptoQuant.

More broadly, there are calls for social media users to withdraw funds from their custodial wallets.

“Bitcoin exchanges are run by people who have studied fiat finance,” says Saifedeen Amos, author of the popular book The Bitcoin Standard. I have written Part of a Twitter post.

“Gambling with depositors’ money is normal and healthy for them, because in a fiat currency system, the central bank destroys the currency to bail them out whenever it goes wrong.”

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of All investment and trading movements involve risk. You should do your own research when making a decision.