On February 14th, Genesis obtained approval from a bankruptcy judge to sell off around £1.3 billion worth of GBTC to repay creditors.
According to cryptocurrency exchange Coinbase, the authorization granted to bankrupt crypto lending firm Genesis to sell its shares of Grayscale Bitcoin Trust (GBTC) is unlikely to disrupt the cryptocurrency market. Coinbase asserts that a significant portion of the proceeds from the sale will likely be reinvested back into the crypto ecosystem, resulting in a neutral impact on the market. Genesis obtained approval from a bankruptcy judge on February 14 to liquidate approximately £1.3 billion worth of GBTC shares to repay creditors. However, it’s worth noting that GBTC has experienced significant outflows exceeding £5 billion since Grayscale Investments received approval to convert GBTC into a spot Bitcoin exchange-traded fund (ETF) on January 10.
Coinbase’s Analysis on Genesis GBTC Sell-Off Impact
Grayscale Bitcoin Trust (GBTC) has experienced significant outflows exceeding £5 billion since Grayscale Investments received approval to convert GBTC into a spot Bitcoin exchange-traded fund (ETF) on January 10. This development has raised concerns within the crypto industry regarding the potential impact on the price of Bitcoin.
In its weekly report, cryptocurrency exchange Coinbase addressed these concerns, stating that although the outcome of the additional GBTC outflows remains uncertain, it believes the funds will likely remain within the crypto ecosystem. Coinbase argued that this would contribute to a neutral overall effect in the market.
The recent approval granted to Genesis, a bankrupt crypto lending firm, to sell-off GBTC shares adds to the uncertainty. The bankruptcy plan allows Genesis to either convert GBTC shares into the underlying Bitcoin asset for creditor reimbursement or sell the shares outright and distribute the cash. The confirmation hearing for this plan is scheduled for February 26.
