Allegations of FTX's Market Manipulation Impacted Bitcoin's 2021 Bull Run: Analysts
Summary:
The inability of Bitcoin (BTC) to reach the $100,000 mark in the 2021 bull market is suggested to be due to the defunct exchange FTX's strategy of selling BTC. According to a post by Joe Burnett from Unchained, FTX leaders allegedly manipulated BTC prices. In a trial involving former FTX CEO Sam Bankman-Fried, allegations emerged of market manipulation, involving the selling of BTC using customer funds upon breaching the $20,000 mark. Without this alleged false sell pressure, analysts suggest Bitcoin might have hit $100,000 in 2021.
The inability of Bitcoin (BTC) to reach the milestone price of $100,000 during the bull run of 2021 is attributed to prominent exchange FTX's strategy of offloading BTC, as per an analysis. A recent post dated October 12 by Joe Burnett, Unchained's Principal product marketing manager, echoed the sentiments that FTX higher-ups deliberately tempered the strength of BTC prices.
Court proceedings involving Sam Bankman-Fried, ex-CEO of FTX, have unveiled allegations of manipulating the market. Testimony from former Alameda Research CEO Caroline Ellison has implicated Bankman-Fried in ordering BTC sales whenever the spot price exceeded $20,000. The catch is that this action involved using FTX clients' fund, an action neither Ellison nor Bankman-Fried was entitled to.
Burnett reacted to this, speculating that this high-stakes operation could have potentially altered the entire trajectory of the 2021 Bitcoin bull run. Burnett claimed that even at the peak of the bull market, Alameda was in financial trouble. The company reportedly leveraged FTX client assets (including Bitcoin) to invest in cryptocurrencies favored by Bankman-Fried. Burnett argues that without false selling pressure, Bitcoin could have touched the much-anticipated $100,000 mark in 2021.
Contrary to these claims, BTC did reach an unprecedented high of $69,000 in November 2021, although expectations were significantly higher. The well-known Stock-to-Flow (S2F) Bitcoin price model predicted a valuation up to $288,000 during the halving phase. Its creator, known as PlanB, suggested a worst-case scenario of BTC scraping $135,000 by December 2021. With BTC not reaching these predicted values, both PlanB and the S2F encountered severe public backlash.
While PlanB remains optimistic about Bitcoin’s future path, the SBF incident has become the cause of entertainment on platforms like Twitter. Other perspectives, including from Blockstream CEO Adam Back, questioned the intention of Bankman-Fried's weakening the Bitcoin market.
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Published At
10/12/2023 3:17:40 PM
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