This Company Wants to Sell $1.60 Billion in Crypto: Market Impact Expected
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This Company Wants to Sell $1.60 Billion in Crypto: Market Impact Expected
2 mins
By Harsh Notariya
5 February 2024, 13:11 GMT+0000
Updated by
Ali M.
5 February 2024, 13:13 GMT+0000
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In Brief
- Bankrupt crypto lender Genesis seeks US court approval to sell $1.6 billion in Bitcoin, Ethereum, and Ethereum Classic.
- Genesis' assets are held in Grayscale Trust products; the proposed sale could significantly impact the crypto market.
- The downfall of major players in 2022 led to heavy losses for Genesis, affecting over 100,000 Gemini Earn program users.
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The bankrupt crypto lender Genesis has filed a request with a US judge for permission to sell an astonishing $1.6 billion in crypto assets.
Market participants anticipate how Bitcoin’s price might respond if Genesis receives authorization for the sell-off.
Genesis to Sell $1.60 Billion in Crypto
According to the court filing, the proposed sale includes significant holdings in Bitcoin (BTC), Ethereum (ETH), and Ethereum Classic (ETC). These assets are currently held in Grayscale’s Trust products.
This move follows FTX’s liquidation of over $1 billion in GBTC holdings, which led to a sharp decline in Bitcoin prices.
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Genesis holds most of its assets, nearly $1.40 billion, in the Grayscale Bitcoin Trust (GBTC), now a spot Bitcoin exchange-traded fund (ETF). The rest are in Grayscale Ethereum Trust and Grayscale Ethereum Classic Trust, worth $169 million and $38 million, respectively. The crypto lender plans to liquidate these assets to support in-kind distributions to creditors.
“Because the Debtors intend to make in-kind distributions to creditors to the maximum extent possible (and to make cash distributions where in-kind distributions are not possible), having flexibility to monetize the Trust Assets and to convert such amounts to the underlying asset will be more efficient and economically beneficial to the Debtors and their estates,” the court filing reads.
TrustsQuantity of UnitsTotal Estimated Value as of 1/30/24Grayscale Bitcoin Trust (ticker: GBTC)35,939,233$1,383,660,470.50Grayscale Ethereum Trust (ticker: ETHE)8,717,520$169,991,640.00Grayscale Ethereum Classic Trust (ticker: ETCG)2,970,892$38,027,417.58Estimated Value as of 1/30/24$1,591,679,528.10Genesis’ Total Estimated Assets. Source: Court Filing
Genesis is closely linked with the larger Digital Currency Group (DCG) network, including Grayscale. Interestingly, after a tough year for the crypto sector in 2022, this connection faced scrutiny.
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The downfall of major players in 2022 resulted in heavy losses for Genesis, leading to its bankruptcy. The situation has also severely affected Gemini, its biggest creditor. In fact, over 100,000 users of the Gemini Earn program have felt the repercussions.
Bitcoin Price Impact Amid Sell-Off
The potential market implications of this massive Bitcoin sale are profound. Analysts are closely monitoring Bitcoin’s price movements. Still, from a technical perspective, a possible inverse head and shoulders pattern has formed on the daily chart, with the neckline situated approximately at $43,500.
This pattern, often seen as a bullish indicator, suggests a potential price surge of 13.5% if accompanied by a breakout with substantial trading volume. Yet, the $49,000 level is expected to serve as a formidable resistance zone for Bitcoin.
Read more: Bitcoin Price Prediction 2024/2025/2030
Bitcoin Price Performance. Source: TradingView
It is worth noting that if the spike in selling pressure coming from Genesis impedes Bitcoin from surpassing the $43,500 neckline, the bullish would be invalidated. Such a scenario could trigger a price correction instead, toward $40,000.
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DISCLAIMER
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Harsh Notariya
Harsh started investing in crypto during the 2021 bull market. He took the opportunity of the market crash in May to learn more about Bitcoin and blockchain technology. Since then, he has helped metaverse projects build an engaging community and educate them on Web3. He has also helped Web3 creators write educational blogs around crypto.
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