SBF and Caroline Ellison conspired to keep Bitcoin under $20K, but did it work?

While there are no information available concerning the size and timing of these trades, the timeframe most likely falls within September and October 2022, just weeks before Alameda and FTX collapsed.Determining whether Alameda effectively acted to reduce Bitcoins cost below $20,000, as alleged by some traders and analysts is difficult, if not impossible. It is possible to examine the significance of FTXs Bitcoin holdings in comparison to other exchanges and the total trading volume.Look at the Bitcoin walletsCurrently, the only trustworthy openly available information pertains to the BTC wallets that formerly made up the exchanges reserves, amounting to less than 47,000 Bitcoin by September 2022, according to Glassnode data. When considering the total Bitcoin volume from significant exchanges, Alamedas hypothesized order size becomes even more inconsequential.According to Messaris “genuine volume” method, which leaves out wash trading, the aggregate Bitcoin volume was listed below $3.5 billion per day between September and October 2022. There is no factor to think that a single entity might successfully reduce the cost for longer than a week, whether its Tesla discharging $936 million worth of Bitcoin or Alameda liquidating FTX clients deposits.To provide some context, Binance held 623,000 Bitcoin in reserves in August 2022, while Coinbase had nearly 690,000 BTC.

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On Oct. 11, Caroline Ellison, the previous head of the now-defunct Alameda Research, notified a U.S. court that she received guidelines from FTXs co-founder and CEO, Sam “SBF” Bankman-Fried, to offer Bitcoin (BTC) if its rate stayed above $20,000. This admission came as a shock to the whole crypto market, but the two conspiring to suppress BTC price, versus really doing it are 2 various things. While there are no details offered relating to the size and timing of these trades, the timeframe most likely falls within September and October 2022, simply weeks before Alameda and FTX collapsed.Determining whether Alameda efficiently acted to suppress Bitcoins cost below $20,000, as declared by some traders and experts is challenging, if not difficult. It is possible to evaluate the significance of FTXs Bitcoin holdings in contrast to other exchanges and the total trading volume.Look at the Bitcoin walletsCurrently, the only trustworthy openly available details pertains to the BTC wallets that formerly made up the exchanges reserves, amounting to less than 47,000 Bitcoin by September 2022, according to Glassnode information. Its possible that Alameda Research held other addresses straight, however provided the significant debt of the trading company, its not likely they had any liquid reserves.One ought to not presume that FTX utilized its entire stack of Bitcoin from users considering that the exchange continued processing client withdrawals until its final day on Nov. 8, 2022. Moving these properties quickly would have aroused suspicion, possibly accelerating their insolvency. Nonetheless, its beneficial to investigate the significance of FTX volumes and holdings.Coinbase vs. FTX month-to-month spot Bitcoin volume, USD. Source: CoinMetricsAs of July 2022, FTX reported an area Bitcoin volume of $30 billion, equivalent to $1 billion each day usually. Nevertheless, relying on these numbers is not suggested, provided the exchanges history of information adjustment, as demonstrated by their falsified insurance coverage fund calculation methodology.Assuming the sales pointed out by Ellison occurred on FTX, a 4,000 BTC order, valued at $80 million at the time, would represent just 8% of the exchanges average daily volume. Moreover, when considering the total Bitcoin volume from significant exchanges, Alamedas speculated order size becomes a lot more inconsequential.According to Messaris “genuine volume” methodology, which leaves out wash trading, the aggregate Bitcoin volume was below $3.5 billion per day between September and October 2022. Even if Alameda attempted to offer 25% of their 47,000 BTC holdings in a single day, that $240 million would represent only 7% of the everyday volume throughout major exchanges.For contrast, in April 2022, MicroStrategy revealed the acquisition of 4,167 Bitcoins at an average price of $45,714, totaling $190 million. This most likely occurred in late March, with Bitcoins rate increasing by 6%, from $44,580 to $47,270. Bitcoin cost index (USD), March-April 2022. Source: TradingViewTwo notable aspects of the price action throughout MicroStrategys acquisition stand apart. The cost dropped listed below $46,000 on the same day as the official announcement on April 5, 2022. More importantly, the $48,000 peak appears to represent the levels where MicroStrategy finished its execution, leading to the $45,714 average price.However, when taking a look at the more comprehensive photo, Bitcoin was trading around $39,500 in the two weeks leading up to MicroStrategys activity and reduced to $39,500 a couple of weeks later. There is no factor to believe that a single entity might effectively suppress the cost for longer than a week, whether its Tesla unloading $936 million worth of Bitcoin or Alameda liquidating FTX clients deposits.To supply some context, Binance held 623,000 Bitcoin in reserves in August 2022, while Coinbase had nearly 690,000 BTC. These 2 exchanges combined held nearly 28 times more Bitcoin than FTX. This fact highlights the restricted effect of SBF and Carolines endeavor in regards to efficient firepower.In essence, there may have been a couple of days where Alameda applied pressure successfully, triggering their sales to suppress Bitcoins price listed below $20,000. However, considering their reserves and the price action of likewise sized orders, the occasion was not likely substantial when analyzing a period longer than a month.This post is for basic info purposes and is not planned to be and should not be taken as legal or investment suggestions. The views, viewpoints, and thoughts revealed here are the authors alone and do not necessarily reflect or represent the views and viewpoints of Cointelegraph.