Did SBF and Caroline Ellison Successfully Suppress Bitcoin’s Price?

• Caroline Ellison claims SBF instructed her to sell Bitcoin if its price remained above $20,000.
• While the intention might have been there, effectively suppressing BTC price is another matter.
• Analysts question the possible impact given the volume and size of other major exchange holdings.

An explosive revelation hints at a possible conspiracy between SBF and Caroline Ellison to manipulate Bitcoin’s price. But how much weight does their alleged plot hold in the vast sea of the crypto market?

Revelation Shocks the Crypto Community

Caroline Ellison, ex-head of the defunct Alameda Research, sent shockwaves through the crypto community on October 11. She told a U.S. court that Sam “SBF” Bankman-Fried, FTX’s CEO, directed her to offload Bitcoin if its value lingered over $20,000. These allegations arise amidst the backdrop of FTX and Alameda’s sudden downfall in late 2022.

Assessing the Actual Impact of the Sell-Off

Deciphering whether Alameda’s trades genuinely capped Bitcoin’s price is no easy task. Available data from Glassnode in September 2022 shows that the exchange’s reserves held under 47,000 BTC. This number is significant but not substantial enough to manipulate the price single-handedly. Even considering the entirety of FTX’s reported volume, their influence appears minimal, especially when weighed against larger exchanges.

Alameda’s Relative Significance in the Crypto Market

Data highlights FTX’s average Bitcoin spot volume at around $1 billion daily in July 2022. However, considering the exchange’s controversial history, these figures could be inflated. In context, even if Alameda tried to offload 25% of their Bitcoin in a day, the resulting sales would barely scratch 7% of the daily volume from major exchanges during that period.

Comparing Market Impact with Other Major Trades

For a clearer perspective, consider MicroStrategy’s acquisition of 4,167 Bitcoins at nearly $191 million in early 2022. While this move did influence prices briefly, the market soon corrected itself. Similarly, Tesla’s massive Bitcoin sales had a temporary impact but didn’t influence the long-term trend. Looking at larger holders like Binance and Coinbase underscores the limited capacity of SBF and Ellison to sway the market.

Conclusion

While Ellison’s claims suggest an intention to manipulate Bitcoin’s price, the practical implications appear minimal at best. Considering the vast volumes and dynamics of the crypto market, Alameda and FTX’s alleged moves might have caused temporary ripples but were unlikely to have sustained, significant impact. In the grand scheme of crypto trading, market forces, not individual players, remain the dominant influence.