The Bitcoin value 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 sturdy GBTC, would go bankrupt.
Since then, the Bitcoin value is recording a aid 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 direction of $17,500 to $18,000 might be on the desk.
DCG /Genesis Safe?
Bitcoin buyers, nevertheless, may be asking themselves what has modified in the entire distress surrounding Genesis / DCG and Grayscale?
DCG CEO Barry Silbert launched a putative letter to buyers yesterday. In it, the CEO defined that whereas DCG owes $575 million to its personal buying and selling arm, Genesis Trading, it is not due till May 2023.
Silbert additionally emphasised that DCG could have revenues of $800 million in 2022. While this represents a decline of about 20% from the earlier yr, Silbert stated that revenues ought to nonetheless be ample to pay Genesis.
Further, the DCG CEO additionally confirmed the the corporate owes Genesis $1.1 billion on a promissory observe that matures in June 2032 and is associated 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 is nonetheless puzzling over attainable eventualities round how DCG can overcome its precarious monetary state of affairs. One of the primary sources of rumors in latest days Andrew Parish, co-founder of ArchPublic, continues to declare an inside, nameless sources.
VC/Attorney that has seen @DCGco information 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 observe was not despatched to buyers. He claims to have heard from a number of buyers 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 soften a Genesis chapter for DCG… and lawsuits that can observe.
An All-Good Solution?
Parish additionally dismissed Messari co-founder Ryan Selkis’ supposed “solution”. Selkis suggested that among the Genesis collectors might convert their claims into DCG most well-liked or debt and warrants (“the Buffett-Goldman deal”), “potentially led by a reputable debt or growth fund”.
There’s a whole lot of issues that led to this mess, however the present state of affairs appears salvageable. I’ve no stake on this straight, simply need to see a great 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 instructed by supposedly main buyers.
So what’s the deal? No one is aware of at the moment, besides presumably DCG CEO Barry Silbert! Stay protected.
