Reaction:
The allegation that SBF, Caroline Ellison, Alameda, and FTX conspired to keep Bitcoin price below $20,000 is certainly shocking, but it is important to separate the possibility of such a conspiracy from the actual evidence. It is challenging, if not impossible, to determine whether Alameda effectively acted to suppress Bitcoin’s price below $20,000.
The publicly available information regarding FTX’s Bitcoin holdings suggests that they had less than 47,000 Bitcoin in reserves by September 2022. It is unlikely that Alameda had any liquid reserves given the substantial debt of the trading company. Therefore, it is unlikely that FTX used its entire stack of Bitcoin from users, as they continued processing client withdrawals until their final day.
When comparing FTX’s reported spot Bitcoin volume to other major exchanges, the alleged sales by Ellison become even more inconsequential. Even if Alameda attempted to sell 25% of their 47,000 BTC holdings in a single day, it would only represent 7% of the daily volume across major exchanges.
In comparison, Binance held 623,000 Bitcoin in reserves in August 2022, while Coinbase had nearly 690,000 BTC. These two exchanges combined held almost 28 times more Bitcoin than FTX. This highlights the limited impact that SBF and Caroline’s alleged venture would have had in terms of effective firepower.
Summary:
– Allegations of a conspiracy to keep Bitcoin price below $20,000 involving SBF, Caroline Ellison, Alameda, and FTX have been made.
– It is challenging to determine whether Alameda effectively acted to suppress Bitcoin’s price below $20,000.
– Publicly available information suggests that FTX had less than 47,000 Bitcoin in reserves by September 2022.
– Comparing FTX’s reported spot Bitcoin volume to other major exchanges shows that the alleged sales would have had a limited impact.
– Binance and Coinbase held significantly more Bitcoin than FTX, highlighting the limited firepower of SBF and Caroline’s alleged venture.
– It is unlikely that a single entity could effectively suppress Bitcoin’s price for an extended period of time.
