FTX Contagion Reaches Grayscale? Is ETHE, GBTC the Next FTT?
Genesis Trading, a crypto brokerage firm, is facing possible solvency issues. Tomorrow morning at 8 AM EST, Genesis Trading will hold a call with creditors to discuss the current situation, FTX exposure and relationships with Alameda Research. If the rumors are true the firm may dissolve the ETHE and GBTC trusts in order to repay their lenders. Digital Currency Group (DCG), is the parent company of Genesis and Grayscale.
Is Genesis, Grayscale Next Amid FTX Contagion?
The contagion effect was triggered by the collapse of FTX, Alameda Research, causing many crypto companies to face withdrawal and financial problems. Some even planned bankruptcy protection.
Genesis Trading is also being rumored as having problems with solvency. Genesis interim CEO Derar Islam will host a client conference call on November 17th at 8 AM EST to discuss the current state of crypto markets as well as Genesis’ lending business. Some believe that the company could dissolve GBTC or ETHE to repay their lenders. Tomorrow will be a clearer day.
Autism Capital tweeted that Grayscale is responsible for ETHE trusts and GBTC, but not Genesis. Digital Currency Group, Grayscale’s parent company, supports Genesis. DCG may have to dissolve trusts due to financial problems if there is a solvency problem.
Genesis Trading stated that it had $175 million in FTX trading accounts locked funds, but not any material exposure to FTX. This transparency was part of Genesis Trading’s reporting. DCG provided $140 Million in equity infusions to Genesis.
Grayscale’s ETHE and GBTC Status
Grayscale’s GBTC suffered a 41% discount during the FTX crisis. Cathie Wood’s Ark Invest recently bought Grayscale Bitcoin Trust shares in the amount of $2.8 million. According to Coinglass data, GBTC has 633.64 BTC in total worth more than $10 billion. At the time this article was written, GBTC premium was at -37.08%.
GBTC Holdings, and the Premium Rate. CoinglassIn the midst of the FTX collapse, ETHE also fell to a new record low. According to Coinglass data, it trades at a premium rate of -34.47%.
ETHE Holdings & Premium Rate Source: Coinglass
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