Genesis Authorized to Sell Over $1.3 Billion GBTC as Permitted by Court

According to a report by Bloomberg, cryptocurrency lending institution Genesis has obtained bankruptcy court approval to sell its holdings in Grayscale Trust assets, including over $1.3 billion worth of GBTC, as well as $200 million worth of ETHE and ETCG.

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Will the sale of 35 million GBTC shares cause selling pressure?
Parent company DCG has concerns, judge states Genesis operates independently

According to a previous analysis report by Chain News, the largest “known” holder of GBTC is actually its parent company DCG. It holds 35.94 million GBTC shares, worth $1.27 billion, which is not far from the data mentioned in the court documents.

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Now that these shares are being dumped on the market, will it cause selling pressure on Bitcoin? According to the latest statistics, Bitcoin ETF still had a high net inflow of $631 million the previous day, which has been consistently above $400 million since 2/8.

The value of Bitcoin transferred from Grayscale GBTC to Coinbase on 2/15 was only $105 million, which is significantly different from the scene of several hundred million outflows during the initial launch of ETF.

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Genesis also stated that it will gradually sell its approximately 35 million GBTC shares with the help of brokers. In practice, it will be sold in a way that minimizes market impact or seeks suitable buyers over-the-counter at negotiated prices.

Genesis’ parent company DCG had tried to delay the proposed sale, but DCG opposes the payment plan proposed by Genesis, not the sale of the related trust funds.

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DCG lawyer Jeffrey Saferstein stated that the parent company is also concerned that Grayscale’s stocks may be sold too quickly, thereby depressing market prices and affecting potential recovery for Genesis creditors. The parent company is also seeking consultation rights on the Grayscale Trust funds.

However, Judge Sean Lane stated that under Chapter 11 of the Bankruptcy Code, Genesis, as an independent operator, has the right to decide how to sell its assets. Genesis also stated that the sale will be strategically conducted with brokers, and this plan has received widespread support from Genesis creditors.

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