On Oct. 11, Caroline Ellison, former head of the now-defunct Alameda Analysis, knowledgeable a United States court docket that she acquired directions from FTX co-founder and CEO Sam “SBF” Bankman-Fried to sell Bitcoin (BTC) if its worth remained above $20,000.

This admission got here as a shock to the complete crypto trade, however the two conspiring to suppress BTC’s worth, versus really doing it, are two various things.

Whereas there are not any particulars accessible concerning the scale and timing of those trades, the timeframe probably falls between September and October 2022, simply weeks earlier than Alameda and FTX collapsed.

Figuring out whether or not Alameda successfully acted to suppress Bitcoin’s worth under $20,000, as alleged by some analysts and merchants, is difficult, if not unimaginable. Nonetheless, it’s attainable to evaluate the importance of FTX’s Bitcoin holdings compared to different exchanges and the full trading quantity.

Take a look at the Bitcoin wallets

At present, the one dependable publicly accessible info pertains to the BTC wallets that beforehand constituted the change’s reserves, amounting to lower than 47,000 BTC by September 2022, in line with Glassnode information. It’s attainable that Alameda Analysis held different addresses immediately, however given the substantial debt of the trading firm, it’s unlikely that they had any liquid reserves.

One mustn’t assume that FTX used its whole stack of Bitcoin from customers for the reason that change continued processing consumer withdrawals till its closing day on Nov. 8, 2022. Transferring these belongings abruptly would have aroused suspicion, doubtlessly accelerating their insolvency. Nonetheless, it’s worthwhile to research the importance of FTX volumes and holdings.

Coinbase vs. FTX month-to-month spot Bitcoin quantity, USD. Supply: CoinMetrics

As of July 2022, FTX reported a spot Bitcoin quantity of $30 billion, equal to $1 billion per day on common. Nonetheless, counting on these numbers shouldn’t be advisable, given the change’s historical past of information manipulation, as demonstrated by their falsified insurance coverage fund calculation methodology.

Assuming the gross sales talked about by Ellison occurred on FTX, a 4,000-BTC order, valued at $80 million on the time, would symbolize solely 8% of the change’s common each day quantity. Moreover, when contemplating the full Bitcoin quantity from main exchanges, Alameda’s speculated order measurement turns into much more inconsequential.

In accordance with Messari’s “actual quantity” methodology, which excludes wash trading, the combination Bitcoin quantity was under $3.5 billion per day between September and October 2022. Even when Alameda tried to sell 25% of their 47,000 BTC holdings in a single day, that $240 million would symbolize solely 7% of the each day quantity throughout main exchanges.

For comparability, in April 2022, MicroStrategy introduced the acquisition of 4,167 BTC at a median worth of $45,714, totaling $190 million. This probably occurred in late March, with Bitcoin’s worth rising by 6%, from $44,580 to $47,270.

Bitcoin worth index (USD), March–April 2022. Supply: TradingView

Two notable facets of the value motion throughout MicroStrategy’s acquisition stand out. First, the value dropped under $46,000 on the identical day because the official announcement on April 5, 2022. Extra importantly, the $48,000 peak seems to correspond to the degrees the place MicroStrategy accomplished its execution, ensuing within the $45,714 common worth.

Nonetheless, when inspecting the broader image, Bitcoin was trading round $39,500 within the two weeks main as much as MicroStrategy’s exercise and decreased to $39,500 a couple of weeks later. There isn’t a motive to imagine {that a} single entity may successfully suppress the value for longer than per week, whether or not it’s Tesla unloading $936 million price of Bitcoin or Alameda liquidating FTX purchasers’ deposits.

To supply some context, Binance held 623,000 BTC in reserves in August 2022, whereas Coinbase had almost 690,000 BTC. These two exchanges mixed held virtually 28 instances extra Bitcoin than FTX. This truth underscores the restricted affect of SBF and Caroline’s enterprise by way of efficient firepower.

In essence, there could have been a couple of days the place Alameda exerted stress efficiently, inflicting their gross sales to suppress Bitcoin’s worth under $20,000. Nonetheless, contemplating their reserves and the value motion of equally sized orders, the occasion was unlikely to be important when analyzing a interval longer than a month.

This text is for normal info functions and isn’t meant to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed here are the writer’s alone and don’t essentially mirror or symbolize the views and opinions of Cointelegraph.