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Bitcoin Falls As Another Leader Wobbles; This Top Fund Is Buying

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Bitcoin reversed near $16,000 early Tuesday morning after briefly hitting a two-year low on Monday. The world’s largest cryptocurrency fell below $15,500 by Monday afternoon as liquidity problems worsened and concerns increased after Sam Bankman-Fried’s FTX collapsed. unverified social media chatter Over the weekend there were crypto industry sources including Digital currency group unitquestioning whether the venture capital giant could be the next crypto domino to fall.


DCG owns Grayscale Investments, the world’s largest cryptocurrency fund manager. Grayscale Bitcoin Trust (GBTC). Grayscale owns more than 3% of the world’s Bitcoin. DGC also owns Genesis Global Trading, a cryptocurrency broker, and CoinDesk, a news outlet for digital assets.

Genesis has warned it may need to file for bankruptcy as it is struggling to raise capital, Bloomberg reported Monday night.

In response to the Bloomberg report, a Genesis spokesperson told TechCrunch that the company has “no immediate plans for bankruptcy.” “Our goal is to reach a consensual resolution of the current situation without the need to file for bankruptcy. Genesis continues to have constructive conversations with our creditors.” He cut his $500 million in half, TechCrunch reported.

Digital asset brokers sought a $1 billion emergency loan last week, The Wall Street Journal reported Thursday. The company suspended withdrawals of its $2.8 billion cryptocurrency lending unit, Genesis Global Capital, on Wednesday after confirming liquidity issues following FTX’s bankruptcy filing.of company announced “Abnormal withdrawal requests” from customers that exceed current liquidity.

Genesis’ biggest borrowers were Singapore-based crypto hedge fund Three Arrows Capital and FTX-affiliated trading firm Alameda Research. Three Arrows Capital, Alameda and FTX are all in bankruptcy proceedings. Three Arrows Capital he filed in July and Alameda and FTX he filed together in November. DCG made a $1.2 billion claim against Three Arrows in court proceedings in July after Genesis lent his $2.3 billion to the company.

On November 11, DCG made a $140 million equity injection into Genesis as FTX began to collapse.

And the Gemini cryptocurrency exchange has suspended withdrawals on interest-bearing accounts as a result of the announcement, as Genesis is the program’s lending partner.

Grayscale Bitcoin Trust Price Drop

grayscale announced that its products “are continuing business as usual and recent events have not impacted our products or operations.” Grayscale has stated that Genesis Global Capital is not a counterparty or service provider of any Grayscale products. In his Oct. 3 SEC filing, Genesis was terminated as an approved participant in his GBTC, Continue to act as a liquidity provider.

The underlying assets of Grayscale products and GBTC are held in separate wallets in cold storage by custodians. coin base (coin), the company said.But Grayscale declined to share a full proof of its reserves, citing “security concerns.” On Friday, it shared a letter from the Coinbase Custody Trust. Confirmed 635,235 Bitcoins in custody.

“For complete clarity: The underlying BTC of Grayscale Bitcoin Trust is owned by GBTC and GBTC alone,” Grayscale tweeted. Many investors online are worried that DCG will start selling its bitcoin holdings to bail out Genesis. But Grayscale reassures investors that this is not the case.

Meanwhile, Cathie Wood buys GBTC at a discounted price. Ark Investment Management owns the Ark Next Generation Internet ETF (ARKW) Bloomberg reported last Monday.

GBTC’s share price plunged to $8.32 on Monday’s close after falling 5.5% earlier in the day. The price has plunged about 78% so far this year as Bitcoin collapses in a wave of cryptocurrency bankruptcies. The stock is well below its all-time high near $58 in February 2021, prior to the current crypto ice age.

Meanwhile, Bitcoin rose close to $16,000 early on Tuesday. Crypto highs fell below $15,500 on Monday following the FTX bankruptcy.

FTX Collapse Explained

FTX Exchange has thrown the cryptocurrency market into turmoil for the past two weeks after filing for Chapter 11 bankruptcy on November 11. Founder and CEO Sam Bankman-Fried resigned and was succeeded by John J. Ray III.Former Enron cleanup executive Condemned SBF’s remarks“Never in my career have I seen such a complete failure of corporate management and complete lack of reliable financial information.”

The fourth-largest cryptocurrency exchange by volume faced a major liquidity crisis after it was revealed that its native FTT token dominated the balance sheet of sister exchange Alameda Research. . Cryptocurrency exchange Binance announced it would liquidate his holdings of FTT on Nov. 6, and within 72 hours he had over $6 billion in withdrawals from FTX.

Although not disclosed at the time, Alameda Research owed FTX a loan consisting of approximately $10 billion in customer deposits. Meanwhile, FTX invested user funds in various cryptocurrency projects and lesser-known tokens, including his own Bankman-Fried initiative, exacerbating liquidity problems. .

Bitcoin fell from $21,200 to nearly $15,800 in four days as FTX crashed, dragging cryptocurrency prices down. According to his Glassnode data compiled by CoinTelegraph, investors transferred more than $3 billion of his bitcoin from exchanges to personal wallets the week of his FTX bankruptcy. Bitcoin recovered around $16,500 as of Nov. 17, but fell again as more liquidity issues surfaced. Prices of major cryptocurrencies are still down more than 20% since FTX’s liquidity problems began on November 5th.

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Follow Harrison Miller on Twitter for stock news and updates. @IBD_ Harrison

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