Why Bitcoin Is Not At Risk Of Knocking $10,000 If Grayscale Increases Selling Pressure

The crypto marketplace has seen utmost selling unit implicit the past week, with Bitcoin signaling a caller yearly debased beneath its existent levels. The fig 1 crypto by marketplace headdress is entangled successful the illness of crypto speech FTX and its consequent fallout. 

As of this writing, Bitcoin (BTC) trades astatine $16,650. In the past 24 hours, the cryptocurrency records sideways terms enactment with a 5% successful the erstwhile week. Other cryptocurrencies successful the apical 10 by the marketplace are pursuing a akin trajectory and are trending to the downside. 

BTC’s terms trends to the downside connected the regular chart. Source: BTCUSDT Tradingview

Bitcoin Market At Risk Of Further Downside?

In the illness of FTX, galore companies person had to state bankruptcy. Contagion is spreading crossed the nascent industry, which mightiness impact large players, including the Grayscale Bitcoin Trust (GBTC), tally by Digital Currency Group (DGC). 

The FTX fallout impacted 1 of DGC’s subsidiaries, crypto lender Genesis. Yesterday, this institution halted caller withdrawal requests from its customers, citing a liquidity crunch triggered by FTX’s downfall. The institution stated: 

The default of 3AC negatively impacted the liquidity and duration profiles of our lending entity Genesis Global Capital. Since then, we person been de-risking the publication and shoring up our liquidity illustration and the prime of our collateral (…). FTX has created unprecedented marketplace turmoil, resulting successful abnormal withdrawal requests which person exceeded our existent liquidity.

Genesis’ genitor institution DCG claims it was unaffected by caller events. However, determination are speculations astir a imaginable capitulation lawsuit wrong the concern steadfast and its different subsidiaries, including the GBTC. 

One of the largest Bitcoin holders successful the satellite with implicit 600,000 BTC valued astatine implicit $13 cardinal and 3 cardinal ETH valued astatine $3.7 billion, if Grayscale oregon DCG go forced sellers, the crypto marketplace volition apt spot caller lows. According to the rumors shared by a subordinate of the crypto community: 

We’re proceeding semi-credible rumors that Genesis whitethorn beryllium having solvency issues (…). We are alert that Grayscale controls GBTC and ETHE, not Genesis. DCG (the genitor institution of Genesis and Grayscale) is backstopping Genesis, and dissolving the trusts whitethorn beryllium indispensable if determination is simply a solvency issue, and if it is large enough.

Bitcoin Unlikely To Keep Declining

A abstracted study from the trading table QCP Capital claims Grayscale is improbable to liquidate its Bitcoin holdings. The steadfast operates nether the U.S. Securities and Exchange Commission (SEC) supervision. 

QCP Capital believes the SEC is improbable to authorize a “one-off redemption for Genesis to conscionable liquidity needs.” The steadfast noted: 

With each of the SEC’s absorption to GBTC this year, we surely don’t expect this to hap anytime soon. On the agleam broadside this besides means a debased accidental of a ample one-off BTC selling unit from this.