Crypto markets hit harder by Terra, Celsius and 3AC than FTX: Chainalysis

Quick Take

  • The collapse of Terra’s algorithmic stablecoin hit the wider crypto markets harder than FTX’s implosion.
  • The failures of Celsius and Three Arrows Capital also caused more realized losses.

The collapse of the crypto exchange FTX wasn't the most impactful event for crypto investors this year — at least from a market-wide perspective. That award is shared by the de-pegging of Terra's algorithmic stablecoin and the subsequent collapses of crypto lender Celsius and hedge fund Three Arrows Capital.

Terra's UST de-pegged and ultimately collapsed in May. Contagion stemming from the collapse then contributed to Celsius filing for bankruptcy and the implosion of Three Arrows Capital in July. FTX later experienced a liquidity crunch after allegedly misusing customer funds and filed for Chapter 11 bankruptcy protection in November. Former CEO Sam Bankman-Fried has since been arrested in The Bahamas and charged with criminal fraud. 

According to crypto analytics firm Chainalysis, UST's collapse caused $20.5 billion in realized losses for investors. Meanwhile, the failure of Celsius and Three Arrows Capital caused $33 billion in losses. FTX's collapse caused 'only' $9 billion in realized losses.

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Chainalysis's report admits that FTX was the most personally impactful event for some, as they will "likely lose any funds they kept on the exchange, and the likelihood of recovering them is unknown." However, the firm notes that "the heaviest hitting crypto events of 2022 were already behind investors by the time the FTX debacle took place" — from a market-wide point of view.

Chainalysis conclusions come after measuring realized gains and losses for a set of personal wallets in a given period — which provides "a directional sense of when investors lock in gains and losses."


Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Adam is the managing editor for Europe, the Middle East and Africa. He is based in central Europe and was a managing editor and podcast host at the crypto exchange OKX's former research arm, OKX Insights. Before that, he co-founded BeInCrypto.com, which he elevated into one of the leading crypto media brands at its peak as the editor-in-chief. Earlier, he served as the editor-in-chief at Bitcoinist.com. Before joining the blockchain and crypto industry, he worked for Looper.com, Grunge.com and SVG.com. He tweets via @XBT002 and can be emailed at [email protected].

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