- A new report by Kaiko takes a closer look at the aftermath of FTX’s collapse in November 2022.
- FTX’s collapse paved the way for Coinbase and OKX to reclaim spot and derivatives market share.
- The exchange’s native token FTT has failed to recover the 95% drop it witnessed after FTX’s collapse.
A new report by crypto analytics firm Kaiko takes a closer look at the aftermath of FTX’s collapse in November last year. Kaiko’s research found that centralized crypto exchanges like Coinbase and OKX were able to reclaim a considerable percentage of the crypto spot and derivatives market share after FTX’s implosion.
According to the Kaiko Research Team, the global crypto liquidity had reduced by half within a week of FTX’s collapse. This vacuum was nicknamed the “Alameda Gap”, referring to FTX’s sister firm Alameda Research, which was founded by Sam Bankman-Fried as a quantitative crypto trading firm.
The Alameda Gap represents the drop in liquidity on crypto exchanges around the world. Market markers and institutional traders incurred huge losses. Meanwhile, the gap has reportedly not yet recovered, with the crypto market depth still at just half of what it was before the FTX fiasco. The collapse of Sam Bankman-Fried’s crypto empire sent ripples throughout the broader crypto industry.
Several market makers, trading firms, and institutions were left crippled in FTX’s wake. Other than the loss of the crypto assets stored on FTX, many investors were also impacted by the dramatic decline in the price of FTX’s native token FTT. Data from CoinMarketCap showed that FTT was trading at $1.2 at the time of writing. In the weeks leading up to FTX’s collapse, FTT was trading between $20 to $30, which represents a drop of over 95% compared to the token’s current price.
In more recent news, Bitcoin’s market dominance in U.S. markets reached its highest level since October 2022, surging to 71% last month. The uptick in BTC dominance suggested that institutional traders were favoring Bitcoin amid surging real yields and worsening risk sentiment in traditional finance.
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