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Bitcoin's Price Dynamics and Market Speculations

Martin Walker
Oct 13, 2023 at 07:32 am

In a surprising turn of events within the cryptocurrency landscape, Bitcoin (BTC) experienced a notable downturn, reaching a valuation of $26,826. This figure fell significantly short of the projected $100,000 mark that was anticipated during the bullish trends of the year 2021. An insightful analysis suggests that the performance was influenced by the activities of the now-defunct FTX exchange, which was observed to engage in persistent selling of BTC.

Joe Burnett, a seasoned senior product marketing manager at Unchained, a notable financial services firm focused on Bitcoin, voiced concerns on X (formerly known as Twitter) on October 12. He added his voice to the growing consensus of individuals asserting that executives at FTX deliberately intervened to curb the strengthening of BTC prices.

Testimony from FTX exposes extensive BTC sell-offs

In the ongoing legal proceedings concerning the former FTX CEO, Sam "SBF" Bankman-Fried, recent testimonies have brought to light potential instances of market manipulation. Caroline Ellison, the former CEO of Alameda Research, an affiliated firm, gave an intriguing testimony. She revealed that Bankman-Fried had urged her to engage in the sale of BTC should its spot price surpass the $20,000 threshold. This revelation unveiled that these sales were executed using FTX customer funds without appropriate authorization.

Burnett's comprehensive analysis underscored the scale of these operations and how they could have had an adverse impact on the entire Bitcoin bull run. He emphasized that Alameda was already in a state of insolvency even during the bullish phase, alleging that FTX had misused customer assets for speculative purchases.

It is speculated that this orchestrated selling pressure had a substantial influence, ultimately preventing Bitcoin from reaching the highly anticipated $100,000 mark in the year 2021.

SBF versus Stock-to-Flow (S2F) Model

Amidst the bullish trends of 2021, BTC/USD did manage to achieve an impressive all-time high of $69,000. However, this accomplishment fell short of the more optimistic predictions that had been anticipated. The Stock-to-Flow (S2F) Bitcoin price model, which was the brainchild of the pseudonymous entity known as PlanB, had initially forecasted a BTC price target of up to $288,000 during the ongoing halving cycle. 

Nevertheless, the actual prices remained well below these optimistic projections, leading to significant criticism of both the S2F model and PlanB himself.

While PlanB remains steadfast in offering optimistic outlooks regarding Bitcoin's future, the SBF controversy has gradually become a source of amusement and discussion on various social media platforms. Consequently, many within the crypto community are starting to question Bankman-Fried's motives, reflecting a growing sense of skepticism in the broader cryptocurrency ecosystem.

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