Genesis buys $2.1 billion in Bitcoin! To pay off debt, sell GBTC and buy BTC

According to reports, cryptocurrency lending company Genesis bought $2.1 billion worth of Bitcoin after selling shares in Grayscale Bitcoin Trust (GBTC). The transaction is seen as repaying a portion of the borrower's debt. This major transaction attracted market attention.

Genesis subject to court approval for sale

According to reports, Genesis sold 36 million GBTC shares on February 4 at a price of approximately $58.50 per share. The transaction occurred after the U.S. Bankruptcy Court allowed it on February 8, when GBTC’s share price was $38.50. Since then, the stock price has risen approximately 50%.

Use of funds: Buy Bitcoin

Genesis received US$2.1 billion in funds to purchase 32,041 Bitcoins at a unit price of US$65,685. Genesis plans to use the Bitcoins to continue paying off its creditors. Currently, the market value of these Bitcoins has reached $2.18 billion.

Coinbase said the massive sale will not have a broad impact on the crypto market. Coinbase noted that the majority of funds are expected to remain in the crypto ecosystem, with an overall neutral impact on the market.

Under the provisions of the bankruptcy plan, you can choose to convert GBTC shares into Bitcoin, hold them on behalf of bonds, or sell the shares directly and distribute cash. Additionally, Digital Currency Group (DCG) claims that its subsidiary Genesis is proposing a payment scheme that would see customers get back more than they are actually entitled to.

Genesis’ liquidation of GBTC has caused market concern. However, this may have affected the Bitcoin market, causing its price to drop. After the news of buying back Bitcoin was disclosed, the price of Bitcoin was initially estimated to be about $68,000.

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