Will Clemente, co-founder of cryptocurrency analysis firm Reflexivity Research, tweeted on Dec. In the tweet, he revealed that cryptos related to Digital Currency Group (DCG) have seen massive sales in the last 24 hours. Cryptocurrencies include Filecoin, Flow, Stacks, Livepeer, Ethereum Classic, Decentraland and others. So, are Genesis and Grayscale within DCG in trouble?
Is the risk too great for DCG and Grayscale?
ArchPublic co-founder Andrew Parish shared that the Genesis creditor has started selling in small lots. It reported that two transactions worth $15 million were closed at 35 percent of the pre-withdrawal suspension value. Commenting on the data shared by Andrew Parish, Adam Cochran noted that if this is true, it could be the early stage of DCG bankruptcy.
Genesis and Alameda had bad loans and intertwined crypto lender-borrower relationships. The bankruptcy of FTX and Alameda could risk the liquidation of Genesis. This could lead to the bankruptcy of its parent company, Digital Currency Group (DCG). DCG’s $1.1 billion promissory note to Genesis could cause the main group to dissolve Grayscale’s GBTC and EETH. This indeed risks bankruptcy for Grayscale. According to data from Coinglass, GBTC is trading with a discount premium rate of -48.79% and EETH with a discount premium rate of -52.58%. In fact, Grayscale’s Ethereum Classic fund ETHC is trading at a discount of over -70%.
Prices fell in the market
Currently, Bitcoin price is trading at $16,729, down over 4% in the last 24 hours. Ethereum price is down 8% and the current price is trading at $1,181. Cryptocurrencies related to Barry Silbert’s DCG such as Filecoin, Mask, Flow and Ethereum Classic fell 26, 16, 16 and 12 percent, respectively. Genesis’ lending platform, Genesis Capital, is already considered bankrupt by many experts. Neither Barry Silbert nor DCG and Genesis made any statements to justify the panic.
Meanwhile, cryptocoin.com As we reported, Bitvavo Custody BV, part of the Dutch cryptocurrency exchange Bitvavo, revealed in a blog that it encountered problems accessing the $290 million allocated to DCG. He said DCG and its affiliates are currently experiencing liquidity issues. He said they are suspending refunds until further notice. In other words, besides DCG, subsidiaries and companies that have sent funds to the institution are also in a difficult situation.
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