Following Coinbase’s announcement that the majority of the money from the GBTC sell-off would “remain within the crypto ecosystem,” a big purchase of Bitcoin was made.
According to reports, the bankrupt cryptocurrency lending company Genesis sold over 36 million shares of the Grayscale Bitcoin Trust (GBTC) in order to buy more Bitcoin and get ready to pay off its creditors.
A recent report from Bloomberg states that on April 2, Genesis liquidated about 36 million GBTC shares, which were worth about $58.50 each at the time. Since Genesis first requested authorization from a US bankruptcy court to sell the 36 million GBTC shares on February 2, when the shares were trading at $38.50, the share price has increased by about 50%.
The $2.1 billion total sales amount made it possible to buy 32,041 Bitcoin on April 2 at a price of $65,685. Genesis will keep trying to pay back its creditors with Bitcoin. The 32,041 Bitcoin is currently valued $2.18 billion as of the time of publication.
Coinbase, a cryptocurrency exchange, recently gave the community the reassurance that the sell-off was not anticipated to have a more significant effect on the market.
“We believe that a significant portion of these funds will probably stay in the cryptocurrency ecosystem, which will have a neutral overall impact on the market,” Coinbase said.
It clarified that Genesis was permitted by the terms of the bankruptcy plan to either sell the shares outright and disburse the proceeds, or convert the GBTC shares into the underlying Bitcoin asset on behalf of the creditors. This follows the Digital Currency Group’s (DCG) contention that Genesis, a DCG subsidiary, has offered to pay its clients more than is reasonable.
According to a report published on February 6, DCG asserts that under Genesis’s present strategy, lenders would receive “hundreds of millions of dollars more than the full amount of their petition date claims.”. In January 2023, Genesis filed for bankruptcy under Chapter 11.