Genesis, a crypto-asset financial services company, stopped withdrawals after the FTX exchange. Then allegations surfaced that he was on the verge of declaring bankruptcy just days later. There are also similar explanations for BlockFi. However, it is worth noting that Genesis denied the bankruptcy claims.
Rumors of Genesis going bankrupt after FTX crash
On Monday, November 21, the cryptocurrency lending platform stated that it has “no plans” to file for bankruptcy in the near future. cryptocoin.com As we have also reported, he stated that he would seek a “consensual” solution to the situation. A Genesis spokesperson said in a statement, “We have no plans to file for bankruptcy any time soon. Our goal is to resolve the current situation through reconciliation without the need for any bankruptcy filings,” he said.
According to a report cited by Bloomberg News, Genesis was having trouble finding new capital for its lending unit. He warned investors that he could file for bankruptcy if additional funds are not secured. According to reports, the crypto investment bank has spent the last few days trying to raise at least $1 billion in new capital.
BlockFi is in trouble too
Also, the Wall Street Journal reported that Genesis approached the crypto exchange Binance in search of an investment, but Binance turned it down due to a potential conflict of interest in the future. According to reports, the company also negotiated with private equity firm Apollo Global Management for financing.
Genesis Global Capital, one of the largest lending platforms, suspended customer withdrawals last week amid a liquidity shortage triggered by a surge in withdrawal requests following the collapse of Sam Bankman-Fried’s FTX. Gemini, which operates a crypto loan product in partnership with Genesis, has discontinued the Earn program. Crypto credit institution BlockFi is already preparing for a potential bankruptcy. Some market analysts believe that the fall of Genesis could lead to a catastrophe in the crypto market.
$5,000 expectation for Bitcoin
As Bitcoin faces selling pressure below $16,000, address activity for Bitcoin has reached a 6-month high according to on-chain data. Some market analysts believe that the fall of Genesis could lead to a massive carnage in the crypto market. Peter Berezin, chief global strategist at BCA Research Inc., wrote in a note to investors:
FTX’s collapse looks more like Enron’s collapse than Lehman’s. Much of the crypto industry is built on a feeble foundation of fraud and greed that no techno-nonsense can hide.
Berezin reiterated his long-term target for Bitcoin at $5,000. This means that Bitcoin could potentially see another 66 percent price correction from current levels. Additionally, further selling pressure on BTC is forcing traders to liquidate their holdings. According to Santiment, the number of profitable transactions fell to the lowest level in the last three years.
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