Genesis Global Hits the Brakes
In a startling tweet on November 16, Genesis Global – the popular institutional crypto lender – announced that they will temporarily halt redemptions and new loan originations. This decision owes itself to what the firm describes as ‘unprecedented market turmoil,’ particularly in the wake of the FTX exchange fiasco. Apparently, their customers decided to take out cash like it was going out of style, resulting in withdrawals that overwhelmed their current liquidity.
When the Seabed Shakes: The FTX Ripple Effect
But wait, there’s more! The troubles don’t stop at FTX. Genesis revealed that their liquidity problems were exacerbated by the downfall of the hedge fund Three Arrows Capital back in June. Talk about a double whammy! As a result, Genesis has launched a $1.2 billion claim against Three Arrows as part of its bankruptcy proceedings. Sounds legal and stressful at the same time, right?
A Case of Too Little, Too Late
Currently, the exact liquidity levels of Genesis remain a mystery wrapped in an enigma. However, previous reports shed light on the $175 million stuck within FTX’s chaotic chaos. In a moment of panic, Digital Currency Group (the parent company of Genesis) decided to throw an emergency $140 million equity infusion their way. Alas, it seems that generosity fell short of satisfying consumer withdrawal demands.
Navigating the Muddy Waters
What’s next, you ask? Genesis Global has stated,
“We have hired the best advisors in the industry to explore all possible options.”
So, they’re not throwing in the towel just yet. They plan to unveil a roadmap for their lending business next week while exploring new avenues for liquidity. Meanwhile, their other services remain operational, which is a relief for all the crypto day traders out there.
Impacts Beyond Genesis: Gemini and Grayscale Stretched Thin
And here comes the twist! Gemini – the well-known cryptocurrency exchange – confirmed that Genesis is their partner for the Earn program and that customer redemptions will not be met in under five business days. However, they reassured users that all other products are safe and customer funds are available for withdrawal.
Then we have Grayscale Bitcoin Investment Trust (GBTC), which currently trades at nearly a 40% discount. The firm claims all of their products are safe and secure. Yet, the dire rumors surrounding Genesis have investors biting their nails!
The Real Lesson Here?
No one wants to feel like a deer in headlights in such unpredictable markets. It’s essential for all investors to stay informed and prepared for such financial roller coasters. Remember, the crypto market might feel like a funhouse mirror, but clarity is key. So buckle up, ladies and gentlemen, this is going to be one wild ride!
+ There are no comments
Add yours