Genesis Granted Permission to Sell $1.6 Billion in GBTC Shares
Genesis, a bankrupt crypto lender, has received approval from a U.S. bankruptcy judge to sell $1.6 billion in Grayscale Bitcoin Trust (GBTC) shares. This move aims to repay creditors who have been waiting for their funds since the lender’s collapse.
Potential Impact on Bitcoin Price
Following Grayscale’s massive sale of crypto to Coinbase last month, Bitcoin’s price experienced a significant drop. As Genesis prepares to sell its GBTC shares, there are concerns about whether history will repeat itself.
According to James Seyffart, a business intelligence analyst with Bloomberg, there is an estimated $1.4 billion worth of selling coming from GBTC due to the Genesis bankruptcy and the situation with Gemini. However, it is unclear how much has already been sold.
Background on Genesis and DCG
Genesis is a subsidiary of Digital Currency Group (DCG), which previously allowed users to earn interest on their cryptocurrency holdings. The company filed for bankruptcy last year after being exposed to the collapsed crypto venture fund Three Arrows Capital. Following FTX’s collapse in 2022, Genesis froze customer withdrawals.
Creditors are still awaiting repayment for their locked-in funds, and DCG has assured them that they will be made whole. The recent court-approved plan allows for the repayment of creditors.
Expert Opinions on Bitcoin Price Impact
Experts believe that the price of Bitcoin will not be as severely affected by Genesis’ selling this time around. Bloomberg ETF expert Eric Balchunas stated that while there could be some negative impact, the success of ETFs has demonstrated their resilience and ability to prevent a significant BTC sell-off.
Additionally, the approval of 10 spot Bitcoin ETFs by the Securities and Exchange Commission in January has contributed to the high demand and liquidity in the market. This, along with relatively low unrealized profits for short-term Bitcoin holders, suggests that any downward pressure on price may be limited.
Hot Take: Impact on Bitcoin Price Likely Limited
Despite concerns about Genesis’ selling of GBTC shares, experts believe that the impact on Bitcoin’s price will be limited. The success of ETFs and the high level of demand in the market are expected to mitigate any potential downward pressure. Additionally, data from CryptoQuant indicates relatively low selling pressure from short-term Bitcoin holders. Overall, it is unlikely that the Genesis news will have a significant impact beyond what has already been observed.
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