The Bitcoin worth plunged to a brand new bear market low at $15,487 on Monday after rumors intensified that Genesis Trading and Digital Currency Group (DCG), which additionally owns Grayscale with its 635,000 BTC robust GBTC, would go bankrupt.
Since then, the Bitcoin worth is recording a reduction rally. At press time, Bitcoin was buying and selling at $16.598 and confronted the essential resistance zone at $16,000. If this resistance is overcome, a fast candle in the direction of $17,500 to $18,000 may very well be on the desk.
DCG /Genesis Safe?
Bitcoin traders, nevertheless, is likely to be asking themselves what has modified in the entire distress surrounding Genesis / DCG and Grayscale?
DCG CEO Barry Silbert launched a putative letter to traders yesterday. In it, the CEO defined that whereas DCG owes $575 million to its personal buying and selling arm, Genesis Trading, it isn’t due till May 2023.
Silbert additionally emphasised that DCG may have revenues of $800 million in 2022. While this represents a decline of about 20% from the earlier 12 months, Silbert stated that revenues ought to nonetheless be adequate to pay Genesis.
Further, the DCG CEO additionally confirmed the the corporate owes Genesis $1.1 billion on a promissory word that matures in June 2032 and is expounded to the Three Arrows Capital default.
“Genesis leadership and their board decided to hire financial and legal advisors, and the firm is exploring all possible options amidst the fallout from the implosion of FTX,” Silbert affirmed in his letter, including that “we will let you know if we decide to do a financing round.”
The letter appears to have calmed the market. However, Crypto-Twitter continues to be puzzling over potential eventualities round how DCG can overcome its precarious monetary state of affairs. One of the primary sources of rumors in current days Andrew Parish, co-founder of ArchPublic, continues to assert an inner, nameless sources.
VC/Attorney that has seen @DCGco knowledge room per cap increase:
“Current valuations are way off, liabilities dwarf assets… nearly impossible to not see a DCG bankruptcy shortly after Genesis.”
— Andrew (@AP_ArchPublic) November 22, 2022
Parish accuses DCG of bluffing and claims that Silbert’s word was not despatched to traders. He claims to have heard from a number of traders and collectors of DCG and Genesis:
This wasn’t despatched to us first, we didn’t see it till it was posted on-line/twitter.
It’s all optics to melt a Genesis chapter for DCG… and lawsuits that may comply with.
An All-Good Solution?
Parish additionally dismissed Messari co-founder Ryan Selkis’ supposed “solution”. Selkis suggested that among the Genesis collectors may convert their claims into DCG most popular or debt and warrants (“the Buffett-Goldman deal”), “potentially led by a reputable debt or growth fund”.
There’s numerous issues that led to this mess, however the present state of affairs appears salvageable. I’ve no stake on this instantly, simply need to see a superb decision, and there’s not a lot time.
Parish countered that DCG and Genesis “have yet to have any meaningful dialogue with Genesis creditors,” as he was informed by supposedly main traders.
So what’s the deal? No one is aware of right now, besides presumably DCG CEO Barry Silbert! Stay secure.
