BlockFi Will No Longer Accept Grayscale GBTC Shares As Collateral, Unwinds All Positions

Crypto lenders out there have been severely struggling to deal with liquidity challenges. On Tuesday, July 12, crypto lender BlockFi introduced that it’s going to now not be accepting Grayscale’s GBTC shares as collateral.

Following the information, the GBTC inventory (OTCMKTS: GBTC) collapsed 5% on Tuesday ending at $12.21. Amid the Bitcoin worth correction, the GBTC inventory has been on a freefall this yr. The share worth of Grayscale Bitcoin Trust (GBTC) has corrected by almost 65% year-to-date.

The current choice from BlockFi highlights the fragility of the crypto lending trade and its publicity to bancrupt corporations. Grayscale had publicity to Three Arrows Capital, which was holding greater than 5% of GBTC inventory at one time limit.

Due to its unhealthy debt with Three Arrows, BlockFi is already struggling losses to the tune of $80 million. BlockFi CEO Zac Prince spoke about their publicity in 3AC and added that they are going to be a part of the embattled hedge fund’s ongoing chapter case.

BlockFi Unwound Its GBTC Position

As per the newest info, BlockFi has already unwound all its GBTC place. On Tuesday, July 12, Zac Price replied to Meltem Demirors relating to the identical. Prince tweeted:

Hey Meltem ???? Just fyi – BlockFi straight holds zero GBTC. The Bloomberg information on that is outdated. We have a pair small loans (like sub $10M) w/ GBTC as collateral which might be within the means of winding down.

Last month, BlockFi entered an settlement with FTX US to return out of its liquidity woes. As per the agreement, FTX US would prolong a $400 million revolving credit score facility together with the choice for the change to amass BlockFi for an quantity of $240 million.

In comparability to different crypto lenders like Celsius Networks and Voyager Digital, BlockFi has been doing comparatively properly. Even in these distressed markets, BlockFi hasn’t stopped buyer withdrawals, not like its different friends.

Bhushan is a FinTech fanatic and holds aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in the direction of the brand new rising Blockchain Technology and Cryptocurrency markets. He is constantly in a studying course of and retains himself motivated by sharing his acquired information. In free time he reads thriller fictions novels and typically discover his culinary expertise.

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