Genesis Global has received permission from a bankruptcy court to sell approximately 36 million shares of Grayscale Bitcoin Trust (GBTC) worth more than $1.65 billion.
The move is part of the bankrupt cryptocurrency lender's comprehensive strategy to repay customers who lent them digital assets.
Genesis to sell stake in Grayscale Bitcoin Trust
The approval, granted by Judge Sean Lane, paves the way for Genesis to convert these shares into Bitcoin or cash. Still, you should utilize the services of a broker to facilitate the process gradually. In addition, Genesis has announced plans to liquidate its shares in Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG). These holdings have a combined value of more than $230 million.
Sean O'Neill, CEO of Genesis, revealed that the current valuation of GBTC stock is hovering around $1.65 billion. The move to redeem and potentially sell these shares was met with mixed reactions.
Genesis' parent company, Digital Currency Group (DCG), asked for the redemption to be postponed. The company argued that such action may be premature. Essentially, it could be detrimental if the court later rejects Genesis' debt repayment offer. DCG's concerns also extend to the rapid sale of shares, which it fears could drive down prices and hurt recovery prospects for creditors.
| name | ticker | Number of shares | Value per share | estimated value |
| grayscale bitcoin trust | GBTC | 35,939,233 | $46.01 | $1,653,564,110.33 |
| Grayscale Ethereum Trust | Ete | 8,717,520 | $22.82 | $198,933,806.40 |
| Grayscale Ethereum Classic Trust | ETCG | 2,970,892 | $11.84 | $35,175,361.28 |
| Total estimate as of February 14, 2024 | $1,887,673,278.01 | |||
Despite these concerns, Judge Lane acknowledged Genesis' autonomy in the Chapter 11 proceeding to determine the best path forward for liquidating its assets. The asset sale strategy supported by Genesis' creditors aims to reduce the market impact by strategically coordinating sales through brokers.
“The Debtor is authorized, but not directed, to redeem, sell, or transfer the trust assets (or the proceeds thereof) based on reasonable business judgment in accordance with the Guidelines,” the court filing states. ” is written.
This development has far-reaching implications for the cryptocurrency market, and in particular for Bitcoin's market value. For example, technical analyst John Gregory noted that an impending sell-off could put downward pressure on BTC. It is currently facing resistance between $52,000 and $54,000. He suggested that Bitcoin's consolidation phase could provide an opportunity for altcoins to gain traction.
“$52,000 to $54,000 has weekly and monthly resistance confluence for me. [I] I want BTC to stop around here. [and] integrate and possibly give [altcoins] There’s room to party harder,” Gregory said.
Read more: Bitcoin Price Prediction 2024/2025/2030
The outcome of Genesis' GBTC stock sale could mark a pivotal shift for investors and stakeholders across the crypto market.
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