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Alameda Research, led by Sam Bankman-Fried, whose nett worth has recently risen to over $8 billion, has increased its Bitcoin purchases by $30,000.
For Alameda Research, a Hong Kong-based quantitative trading and liquidity solutions firm run by FTX CEO and founder Sam Bankman-Fried, Bitcoin’s (BTC) agonising drop below $30,000 on Tuesday transformed into a so-called “buy the dip” opportunity.
Quantitative trader Sam Trabucco revealed late Tuesday that the company purchased Bitcoin during its latest price decline, adding that the company’s cautious strategy to go long BTC/USD surfaced out of at least three “recovery” catalysts: a potential end to the ongoing crypto FUD (China ban, Grayscale epic unlock, etc.), the stock market’s intraday recovery, and weaker long liquidations in the derivatives market.
“In my view, all these points [to] a similar (if vague) direction,” Trabucco wrote.
“News impact tends to revert? I’d expect crypto to rally more. Stock market *did* revert? I’d expect crypto to have reverted more, too. Liquidation moves usually revert? Same story.”
Up until the last day or so, the market has been stuck in a fairly consistent “zone” for a bit now. It’s honestly been sorta … boring?
A thread about X. pic.twitter.com/RJxIuQQbSH
— Sam Trabucco (@AlamedaTrabucco) July 21, 2021
Panic-sell ahead? Opinions differ
On Wednesday, the claims were made as Bitcoin tried a slight recovery above $30,000. On the FTX exchange, which just raised a record $900 million, the cryptocurrency reached an intraday high of $31,669 dollars. Later, the price corrected downward, though only little, indicating modest selling pressure near the sessional high.
Meanwhile, AvaTrade Ltd’s Naeem Aslam, chief market analyst, emphasised Bitcoin’s resiliency in the face of recent gloomy forecasts, with some predicting that a close below $30,000 would send the cryptocurrency tumbling.
“In reality, that is not what we have seen,” the executive told Bloomberg. “The Bitcoin price has been stable, and we have not seen any panic selling.”
However, Jeffrey Wang, the head of the Americas at crypto finance company Amber Group, is sceptical. According to a former Morgan Stanley executive speaking to Cointelegraph, Bitcoin continues to trade under the global risk-on impact, putting the cryptocurrency at risk of more losses. He went on to say:
“With relatively calm price action, recently, short-term speculation and trading have waned somewhat. When we do see more volatile movements, expect more traders to show interest. But that could push the price down further if the risk backdrop remains weak.”
Edward Moya, senior market analyst for the Americas at Oanda, also weighed negatively on the latest Bitcoin–Wall Street correlation. He noted that if the United States stock indexes enter into the “panic selling mode,” it would lead the flagship cryptocurrency lower in tandem.
In a Tuesday note, Moya wrote, “It is crucial that the digital coin regains ground above the $30,000 level, as a big breach might result in a massive technical selloff.”
In the case of Alameda, Trabucco acknowledged that the company has recognised downside risks in the Bitcoin market, but said its most recent acquisition spree was focused on the cryptocurrency’s long-term prospects. He stated, ”
“We do put on fairly big delta positions longish-term for a quant team, and I’ve been glad that it’s been this direction so frequently — bull markets are way more fun.”