Binance dumping $500m FTT – which is only ‘part of’ the over $2b it has – triggers shorts on FTX and SOL. CZ even compared FTX to Luna. Just as the downward spiral of CEL token make heathy profits for those shorting it, unprecedented opportunity is seen in the inevitable collapse of FTT and SOL.
There is a run of customers withdrawing their crypto from FTX and other SBF exchanges, just in case withdrawal limits are imposed. This withdrawal will be like no other, if it means that what is left on the SBF exchanges are the counterfeit crypto manufactured on the centralised exchanges which have hitherto been unaccounted for.
Alameda will be working overtime to pump the sliding prices of FTT and SOL, but each pump gives an opportunity for Binance to dump more.
Alameda’s supposed ENRON-style balance sheet, shows $16b, but most of it is made up of illiquid SOL and FTT tokens. These tokens have little organic demand and their price is inflated by Alameda’s own ‘market making’ artificial volume trading. Who is going to buy these illiquid tokens?
The Flywheel scheme now spinning in reverse
The SBF empire is a product of the ‘flywheel scheme’ used by Celcius. This scheme rests on valuing its assets based on inflated sales it has made to other related entities. That is, creating assets out of thin air. These assets, inflated by pumping through Alameda’s “market making”, are then used to deceive creditors and investors to part with real money to further accelerate the SBF flywheel.
Billions have been artificially created by this scheme. But these assets cannot be realised. They cannot be monetised because there is no real market for them.
Celcius used this scheme. It bought huge volumes of its own token to inflate the price and score $750m in investment. But it could not go on forever and the flywheel started to spin in reverse, shredding the price as even the small amount of sales, crashed the price.
The same applies to FTT. There is no organic demand for FTT. The same can be said of SRM, OXY, FIDA and MAPS. Even, dare we say it, the dysfunctional SOL. In all cases, Alameda’s holdings of these coins way exceed the circulating supply. Take FTT. There is, at best, 21,102 holders of FTT coin or which 92% are owned by the top 10 holders. Yes, you guessed it, these are SBF and insiders. The top 100 own 99.1% of FTT in circulation.