Court Approves Genesis’ Sale of GBTC Shares Valued at $1.3 Billion
Genesis Global Holdco LLC, a subsidiary of Digital Currency Group (DCG), has been granted permission by a bankruptcy court to liquidate around 35 million shares in Grayscale’s GBTC fund, with a total value exceeding $1.3 billion. The court ruling, made by Judge Sean Lane, allows Genesis to convert its GBTC shares into either bitcoin or cash.
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Is Genesis About to Make a Billion-Dollar Crypto Move?
Yesterday, a US court approved Genesis’s sale of GBTC (Grayscale Bitcoin ETF) shares worth $1.3 billion, but the market doesn’t seem too concerned. Considering the daily influx of over 500 million new shares, it’s not surprising. The additional supply will likely be absorbed. Furthermore, Genesis plans to divest more than 11 million shares in two Grayscale Ethereum Trusts, valued at over $200 million.
Despite objections from DCG regarding the timing of the sale, as it may be premature pending a court decision on a debt repayment plan, the court allowed the transaction to proceed.
This news comes at a time when Genesis is dealing with legal obligations, having agreed to settle a lawsuit filed by the Securities and Exchange Commission (SEC). Genesis has agreed to pay a hefty $21 million fine to resolve allegations related to its participation in the Gemini Earn program.
The lawsuit targeted Gemini and Genesis, accusing them of conducting unregistered securities offerings to retail investors through the crypto lending platform. While resolving the legal disputes with the SEC, this settlement highlights the regulatory challenges faced by companies operating in the cryptocurrency industry.
Impact on the Crypto Market
This move could have an impact on the entire cryptocurrency market, including the value of Bitcoin.
Currently, Bitcoin has surpassed $52,000 on Wednesday, reaching a market value milestone of $1 trillion and rebounding from Tuesday’s decline. With increasing demand for ETFs, some traders are eyeing the $64,000 level in the coming weeks.
However, Swissblock analysts have warned of Bitcoin’s slowing momentum despite its ongoing upward trend, stressing the importance of maintaining the $46,000 support level.
Analyst John Gregory predicts that the potential sale may cause a drop in BTC’s price, especially as it encounters resistance around $52,000 to $54,000. This could create an opportunity for alternative cryptocurrencies to experience upward movement during a consolidation phase for Bitcoin.
As Genesis navigates these challenges, stakeholders will closely monitor its impact on the broader cryptocurrency ecosystem. The GBTC share sale seems to have significant implications, and only time will reveal its effects on the crypto space before the halving.
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