Bitcoin (BTC) Falls to 2-Year Low on Genesis Bankruptcy Fears
- Bitcoin fell to its lowest level since October 2022 on Genesis bankruptcy worries.
- Genesis Global Trading told investors it could face bankruptcy if it can’t raise $1 billion.
- Genesis says it has no plans to file bankruptcy “imminently.”
- Binance declined to invest in Genesis.
Bitcoin fell to a two-year low today after reports surfaced that the asset management giant Genesis Global Trading could face bankruptcy.
The digital currency dropped to $15,480, the lowest level in two years, after news broke that Genesis Global Trading told investors that bankruptcy was an option if it couldn’t raise funds.
The institutional asset management company has been looking for $1 billion in funding over the last few days. They need the capital to shore up reserves from its crypto-lending arm, Genesis Global Capital, which paused withdrawals after the FTX collapse. These recent reports were the first reports of Genesis Global Trading potentially becoming insolvent.
The news of Genesis’s woes spread fear throughout the crypto community. As a result, Bitcoin fell to its lowest level since October 2020. However, the market sentiment later improved, and BTC briefly recovered.
"We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing," the investment firm told Bloomberg.
For a while, it seemed like BTC was recovering, and the crypto hit a high of $15,911. However, the bulls were unsuccessful in pushing it back above the $16,000 mark. Further breakouts seem unlikely, and BTC is currently trading at about $15,706.
Why Genesis is Important for BTC
Genesis is a key player in the industry, facilitating crypto asset management for institutional investors. Genesis Global Trading facilitated over $116 billion in spot trades for its clients, according to its website. Its crypto lending arm, Genesis Global Capital, had $2.8 billion in total active loans by the end of Q3 2022.
Even worse, its sister company controls the Grayscale Bitcoin Trust (GBTC), which holds approximately $10.6 billion in BTC, or 3% of the global supply. The fund recently fell to new lows, despite assurances from Genesis that Grayscale has “no exposure” to Genesis Global Capital.
Binance Declined to Invest
Genesis Global Trading was looking for $1 billion to secure the reserves for its crypto lending arm. One of the investors they approached was Binance, which declined to invest. The major crypto exchange cited potential conflicts of interest as a reason to pass on the investment, reports say. Genesis also approached the equity firm Apollo Global Management for funding, but it is unclear whether they are interested in an investment.
On the Flipside
- Genesis is likely still in talks with investors. If they find one, this could be bullish news for Bitcoin and crypto.
Why You Should Care
The collapse of Genesis would send shockwaves across the crypto space, pushing prices even lower.
Read about the Grayscale Bitcoin Trust, one of the world’s largest BTC holders:
Grayscale Bitcoin Trust (GBTC) Falls to New Lows
Read more about the issues with Genesis Global Capital:
Genesis Sought a $1 Billion Emergency Loan Before Halting Withdrawals
Read more: https://dailycoin.com/bitcoin-btc-falls-to-2-year-low-on-genesis-bankruptcy-fears/
Text source: DailyCoin.com
