Genesis Offloads 36 Million GBTC Shares for Bitcoin, Strategizing to Clear Debts Amid Bankruptcy Proceedings!

In a bid to address its financial obligations, cryptocurrency lending firm Genesis reportedly sold approximately 36 million shares in the Grayscale Bitcoin Trust (GBTC), intending to bolster its Bitcoin holdings to facilitate debt settlements with creditors.

Genesis Capitalizes on GBTC Surge: Liquidates Shares for $2.1 Billion, Acquires 32,041 Bitcoin to Repay Creditors

Highlighted in a recent Bloomberg article, the liquidation of these shares occurred on April 2, with each share valued at around $58.50 at the time. This decision followed a notable surge in share value, increasing by roughly 50% since Genesis sought approval from a U.S. bankruptcy court on February 2 to sell the GBTC shares when their price stood at $38.50.

The aggregate sales proceeds amounted to $2.1 billion, enabling Genesis to acquire 32,041 Bitcoin at a price point of $65,685 each on the same day. These Bitcoin holdings will be utilized in ongoing efforts to repay creditors.

Coinbase Assures Stability as Genesis Converts GBTC Shares to Bitcoin Worth $2.18 Billion

At the time of disclosure, the acquired Bitcoin stash was valued at $2.18 billion. Despite the substantial sell-off, Coinbase, a leading cryptocurrency exchange, reassured the market that this action was unlikely to destabilize the broader crypto market.

Coinbase noted that much of the funds from the sale would likely remain within the crypto ecosystem, contributing to a neutral overall effect in the market. Genesis was permitted by the bankruptcy plan's provisions to either directly convert GBTC shares into Bitcoin for creditors or sell the shares and distribute the proceeds in cash.

Genesis Initiates Strategic Financial Moves Post-Bankruptcy, Proposes Generous Compensation Plan for Creditors

This financial maneuvering by Genesis follows assertions from the Digital Currency Group (DCG), its parent company, which stated that Genesis had proposed compensating customers beyond their entitlements. DCG claimed that Genesis's proposed plan would result in lenders receiving "hundreds of millions of dollars more than the full amount of their petition date claims."

Genesis's actions come after its Chapter 11 bankruptcy filing in January 2023, signaling a critical phase in its efforts to stabilize operations and fulfill financial commitments to creditors.