Realized losses from the FTX collapse peaked at $9B, a significant decrease from previous crises.
According to Chainalysis, weekly realized losses peaked at $20.5 billion when Terra Luna (LUNC) crashed and rose to $33 billion when 3AC and Celsius followed suit.
Chainalysis, a blockchain analytics company, has made an effort to put the FTX collapse into context by comparing the peak weekly-realized losses that followed the collapse of the exchange to other significant crypto crashes in 2022.
According to the data released on December 14, weekly realized losses peaked at $20.5 billion following Terra USD (USTdepegging )’s in May and at $33 billion following the subsequent collapse of Three Arrows Capital and Celsius in June.
In contrast, during the FTX fiasco, weekly realized losses peaked at $9 billion in the week beginning Nov. 7 and have been declining ever since.
By inspecting individual wallets, evaluating the value of assets as they were acquired, and deducting the value of these assets when they were transported elsewhere, the analytics firm was able to determine the total realized losses.
The statistics, however, may still have exaggerated realized losses because it treated each transfer between wallets as a selling transaction. Chainalysis also pointed out that the chart ignores other data, such as user funds that are frozen on FTX’s exchange.
Think of these statistics as an upper bound on the realized gains of a specific wallet because “we can’t assume that any cryptocurrency sent from a given wallet is necessarily going to be liquidated,” it said.
While Chainalysis’ data only includes realized losses, on-chain analytics firm CryptoQuant recently published statistics on how the FTX crash affected net unrealized losses for Bitcoin BTC tickers down $17,716.
It discovered that BTC’s unrealized losses peaked at -31.7% after the FTX crash, while those of 3AC/Celsius and Terra Luna only reached a maximum of -19.4%.
In a tweet on November 17, the analytics data company Glassnode also called attention to the substantial amount of unrealized losses resulting from the FTX crash and compared them to the top -36% experienced during the 2018 bear market.
Up until the investment is sold, the gains or losses linked with it are regarded as unrealized. These losses or gains are “realized” during the selling process. Paper losses are another name for unrealized losses.