Crypto News– The price of Bitcoin surged this week, reaching heights not witnessed since the 2021 bull run. However, the looming question remains: will this upward trend be sustained?
1.6 Billion Dollars Grayscale Liquidation Looming: Impact on Bitcoin?
Recent news revealed that a U.S. bankruptvcy judge has granted Genesis, a bankrupt crypto lender, the green light to sell $1.6 billion worth of Grayscale Bitcoin Trust (GBTC) shares. This move aims to settle debts owed to creditors who have been awaiting repayment since the lender’s collapse.
Just last month, the market experienced significant pressure when Grayscale offloaded substantial amounts of crypto to its custodian, Coinbase, resulting in a sharp decline in the price of BTC. Consequently, there’s a natural concern about whether a similar scenario will unfold once Genesis proceeds with its sell-off.
James Seyffart, a business intelligence analyst with Bloomberg, emphasized, “There is at least $1.4 billion worth of selling coming from GBTC based on the Genesis bankruptcy and the situation with Gemini, possibly more. But we also don’t know how much was already sold.”
For context, Genesis, a subsidiary of Digital Currency Group (DCG), formerly facilitated crypto interest earnings for users. Its bankruptcy filing a year ago revealed exposure to the collapsed crypto venture fund, Three Arrows Capital. Following the collapse of crypto giant FTX in 2022, Genesis subsequently halted customer withdrawals.
Creditors are still awaiting the funds they had invested in the product, and DCG has assured that creditors will be reimbursed in full. The judge-approved plan this week signifies a step towards fulfilling these obligations by enabling Genesis to repay its creditors.
Leave a comment