According to a report by Bloomberg, cryptocurrency lending institution Genesis has obtained bankruptcy court approval to sell its owned assets, including over $1.3 billion worth of GBTC, as well as $200 million worth of ETHE and ETCG.
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Will the sale of 35 million GBTC shares cause further selling pressure?
Parent company DCG has concerns, judge states Genesis operates independently
According to a previous analysis report by Chain News, the largest “known” holder of GBTC is actually its parent company DCG, which owns 35.94 million GBTC shares worth $1.27 billion. This data is not far from the information in the aforementioned court documents.
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Now that these shares are being sold on the market, will it cause further selling pressure on Bitcoin? According to the latest statistics, Bitcoin ETF still shows a high net inflow of $631 million the day before, continuously exceeding $400 million in net inflows since February 8.
The value of Bitcoin transferred from Grayscale’s GBTC to Coinbase on February 15 was only $105 million, which is significantly different from the hundreds of millions that flowed out daily during the initial launch of the ETF.
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Genesis also stated that it will gradually sell the approximately 35 million GBTC shares with the help of brokers. In practice, it will be done in a way that minimally affects the market, either by selling in batches or finding suitable buyers off-exchange at negotiated prices.
Genesis’ parent company DCG had attempted to delay the proposed sale, but it is opposing the payment plan proposed by Genesis, not the sale of the related trust funds.
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In response to the price increase, Genesis wants to pay off more customer funds, DCG cries “violation of US bankruptcy law”
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DCG lawyer Jeffrey Saferstein stated that the parent company is also concerned that Grayscale’s stocks may be sold too quickly, thereby depressing market prices and affecting potential recovery by Genesis creditors. The parent company is also seeking consultation rights regarding the Grayscale trust funds.
However, Judge Sean Lane stated that under Chapter 11 of the Bankruptcy Code, Genesis, as an independently operating entity, has the right to determine how to sell its assets. Genesis also stated that the sale will be strategically conducted with brokers, and this plan has received widespread support from Genesis creditors.
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Further Reading
In response to the price increase, Genesis wants to pay off more customer funds, DCG cries “violation of US bankruptcy law”
Is the GBTC sell-off not over yet? Genesis applies to bankruptcy court to sell $1.4 billion worth of GBTC