Genesis’ $1.6 Billion Crypto Sale: Market Impact

Bankrupt lender Genesis wants to seek US court approval to sell $1.6 billion worth of crypto assets.

Market participants are anxious to see how the price of Bitcoin may react if Genesis gets permission to sell.

The startup plans to sell $1.60 billion worth of cryptocurrencies

Genesis plans to sell a total of $1.6 billion worth of cryptocurrency. After Court documents The proposed sale includes large amounts of Bitcoin (BTC), Ethereum (ETH) and Ethereum Classic (ETC), which are currently held in Grayscale escrows.

This move follows FTX’s sale of over $1 billion worth of GBTC shares, which caused Bitcoin’s price to plummet.

Most of Genesis’ assets, around $1.4 billion, are in the Grayscale Bitcoin Trust (GBTC), which is now a Bitcoin exchange-traded fund (ETF). The balance is split between Grayscale Ethereum Trust and Grayscale Ethereum Classic Trust, worth $169 million and $38 million, respectively. Genesis intends to dispose of these assets to make financial distributions to its creditors.

“The goal is to make as many cash distributions as possible to creditors and, if that is not possible, to make cash distributions. The court document explains that it makes the most economic sense for Genesis and its creditors to monetize the collateral assets and convert them into underlying assets.” .

Genesis is closely associated with the Digital Currency Group (DCG), which also includes Grayscale. This connection was tested especially after the 2022 crisis for the crypto market.

The collapse of major market players in 2022 hit Genesis hard and led to bankruptcy. The situation has also severely affected Gemini, Genesis’ main lender, affecting more than 100,000 users of the Gemini Earn program.

Impact on Bitcoin Price During Selloff

The potential impact of this massive Bitcoin sale on the market is significant. Analysts closely monitor the development of the price of Bitcoin. The daily chart suggests a possible head and shoulders pattern, with the neckline around $43,500.

This pattern is often taken as a sign of a 13.5 percent price increase for the breakout of a trading high. However, the $49,000 level could act as a strong resistance area for Bitcoin.

Find out more here: How do you buy Bitcoin?

If selling pressure from Genesis prevents the price of Bitcoin from breaking above $43,500, it may invalidate the trading forecast. In such a case, the price may correct to $40,000 instead.

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