After a week of the FTX collapse, Digital Currency Group (DCG) and its two subsidiaries, Genesis and Grayscale Investments, are in the spotlight.
Grayscale Investment is a subsidiary of Digital Currency Group, which is currently in the spotlight for owing Genesis $1 billion. Grayscale Investments stopped accepting withdrawals from its Grayscale Bitcoin Trust (GBTC) last week.
On Monday morning, November 21, the crypto market was in the red, leading to declines in the value of numerous significant coins, with BTC at $15,985.50 and ETH at $1,120.80.
Prior to stating that it was stopping the withdrawal, Genesis Trading attempted to raise $1 billion as well, according to Wall Street Journal.
Regarding these speculations, analysts suggest that DCG and Genesis may not be as good of shape as they claim, which could affect other companies in the same network, like mining firm Grayscale and Foundry.
Derar Islim, Genesis’ interim CEO, said:
On Wednesday, Genesis made its initial announcement about stopping withdrawals and declared that its Gemini Earn program would be ending.
At that time, Genesis stated that their decision to halt services was motivated by “severe market disruption and loss of industry confidence” by FTX’s demise. However, it didn’t say anything about its own liquidity at press time.
Due to the sudden failure of FTX and Alameda following the extreme fear of traders, the crypto market is still highly fragile, making it easy for rumors to circulate.
On November 9, 2021, the overall market cap of the crypto sector topped $2.8 trillion. At the time of publication, the market cap was down 70% at $831 billion.
If DCG, Greyscale, or Genesis experience unmanageable financial hardship, a potential catalyst for the market to test the 2018 bottoms may enter the picture.
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Source: Cryptocurrency - investing.com
