Looking back: FTX did not really collapse all by itself, but LUNA had given the first punch that pushed everything down.

2022 will probably forever remain a year to study for the Crypto history books, there were even worse years early on in Crypto, but probably no year where Crypto took such blows even after being a trillion-dollar industry, or any industry did. From the legendary LUNA collapse to Three Arrows Capital to Celsius to BlockFi to FTX to DCG to much much more.

But now as we are further away from those events and the dusk is starting to settle, we can finally start to contemplate what the actual trigger was and it usually is not that easy. The FTX collapse would not have happened if FTX itself would not have been in a bad state beforehand that CZ got to know about.

But how did FTX get in such a bad state in the first place?

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Alameda Research, SBF‘s second firm, Balance on FTX. We can see a massive plunge during the LUNA crash

This chart is the answer to that, showing the Alameda Research Balance on FTX, which we now know was just a puppet for SBF to get his money out of FTX and gamble it there. We can see on the chart how the balance dropped a massive -$12B(!) just in a matter of weeks, which also coincide with the LUNA collapse.

So it is really no mystery anymore that LUNA and Do Kwon where the trigger that blew and then spread its fire further into Crypto. I remember back when LUNA collapsed many were saying that the contagion of it would be huge, but I don‘t think anyone expected anything that huge.