Genesis Global Capital Moves $1.5B in Bitcoin and Ethereum to Repay Creditors, Triggering Market Volatility

The cryptocurrency industry recently experienced a substantial reduction in its overall market capitalization as prices plummeted sharply over the weekend.

The cryptocurrency market experienced a downturn over the weekend as prices fell sharply.

Bitcoin dropped below the $60,000 mark on Saturday, August 3. At the same time, Ethereum fell to a low of $2,860, dipping below the $3,000 level. This caused other cryptocurrencies to follow suit, with most bleeding red immediately.

Such volatility is not uncommon within the crypto space, where prices often fluctuate dramatically in response to various factors. These price swings are typically driven by market reactions to recent news or events. In this instance, the latest price declines can be attributed to repayment plans by bankrupt crypto lender Genesis Global Genesis Global Genesis Global is a full-service digital currency prime brokerage catering to the increasing demand for cryptocurrency trading. It provides a broad range of services, including trade execution, custody, lending, and derivatives.Genesis Global was founded in 2013 and is headquartered in New York City, with additional offices in London, Hong Kong, Singapore, and Israel. It is a subsidiary of Digital Currency Group (DCG), one of the largest cryptocurrency companies in the world.

Over the years, Genesis Global has played a significant role in the development of the cryptocurrency market. It was one of the first companies to offer over-the-counter (OTC) trading for Bitcoin and has since expanded its services to include other major cryptocurrencies. Genesis Global also provides fiat on-ramp and off-ramp services, making it easier for institutions and individuals to enter and exit the cryptocurrency market.

In recent months, Genesis Global has been at the center of the FTX bankruptcy saga. It was revealed that Alameda Research, the hedge fund founded by Sam Bankman-Fried, had borrowed heavily from Genesis Global. When FTX and Alameda collapsed, Genesis Global was left with a large hole in its balance sheet.

This led to Genesis Global halting withdrawals in November 2022 and eventually filing for Chapter 11 bankruptcy in January 2023. The company's restructuring plan was approved by its creditors in March 2023, paving the way for Genesis Global to begin repaying its debts.

Now, Genesis Global has finally completed its restructuring and is repaying its debt to creditors after three years. According to Bloomberg, the lender has now started giving its creditors an immediate distribution of about $4 billion in both cryptocurrencies and fiat currencies.

The distribution details indicate that Bitcoin creditors will receive 51.28% of their claims, Ethereum creditors will obtain 65.87%, and Solana creditors will get only 29.58% of their claims.

As such, Genesis moved over $1.5 billion worth of Bitcoin and Ethereum on Friday, which triggered a wave of market volatility. According to on-chain data from Arkham Intelligence, the firm moved a total of $1.5 billion, which included 16,600 BTC (valued at roughly $1.1 billion) and 166,300 ETH (worth about $521.1 million). Among the notable recipients was billionaire Mark Cuban, who received $19.9 million worth of Ethereum in repayments.

Many investors seemed to react to the upcoming influx of new money by liquidating their holdings, which in turn contributed to a drop in the prices of many already struggling cryptocurrencies. The price decline could also be attributed to repaid creditors deciding to cash out their digital assets after a prolonged wait of three years, thereby adding to the selling pressure and exacerbating the price drop.

The cryptocurrency market experienced a sharp decline, decreasing by over 5.7% within 24 hours, bringing the market capitalization down to $2.15 trillion. As previously noted, Bitcoin fell below the $60,000 mark, and Ethereum dropped below $2,900.

Genesis Global is not the only bankrupt crypto company engaged in creditor repayments recently. Bankrupt Bitcoin exchange Mt. Gox has also been repaying its creditors for the past few weeks. The market could continue to react to these large movements of funds as creditors receive their repayments.

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