The whole cryptocurrency market is under great pressure due to the problems FTP extension. At the time of writing, bitcoin is trading around $16,600, while the price prior to the exchange’s implosion was steadily above $20,000. Now it looks like the biggest bitcoins (BTC) global fund of Grayscale Investments, which manages over 600,000 BTC, too be under pressure.
Should we worry?
Falling over FTX has several of them big parties in trouble carried. Cryptocurrency lending platform Genesis is also among the parties currently in trouble. This company falls under the Digital Currency Group (DCG), which is also the parent company of Grayscale.
We recognize how difficult the past week was due to the impact of FTX news. At Genesis we are entirely focused on doing everything we can to serve our customers and navigate this difficult market environment.
— Genesis (@GenesisTrading) November 16, 2022
DCG says it is unaffected by the collapse of FTX. However, there are rumors of a possible capitulation of the investment firm and its subsidiaries, which also includes the Grayscale Bitcoin Trust (GBTC).
GBTC is the largest bitcoin fund in the world, with a total of over 600,000 bitcoins worth about $10 billion. If the Digital Currency Group and by extension Grayscale were to sell their BTC, it could deal a major blow to the price.
Small chances of bigger problems
If we are to follow a report from QCP Capital, Grayscale is unlikely to need to liquidate its bitcoin. The company operates under the supervision of the United States Securities and Exchange Commission (SEC) and must therefore meet stringent requirements.
Here is the second part of our market update. https://t.co/XgYHl9feM1
— QCP Capital (@QCPCapital) November 19, 2022
QCP Capital does not believe the SEC will give permission to liquidate GBTC’s bitcoin to support Genesis. “There is little chance that this will lead to heavy selling pressure,” analysts at QCP Capital said.
Ultimately, we’ll just have to wait and see and things aren’t looking good for the industry right now. It is to be hoped that these are sensational rumors, otherwise we will soon be able to enter at very low prices, which for some is not a disaster.
