Bitcoin traders were spooked by a report that digital-asset brokerage Genesis told investors it might need to file for bankruptcy if it can't raise money.
Bitcoin briefly tumbled to its lowest level in two years on Monday after Bloomberg News reported that Genesis, the digital-asset brokerage and lender, has told investors it could be forced to file for bankruptcy if its current fundraising efforts are unsuccessful.
The price of bitcoin BTCUSD tumbled to $15,615 on Monday after Bloomberg published its report, its lowest level since November 2020, according to CoinDesk. Speculation has been mounting in recent days about financial issues being faced by Genesis, which halted redemptions and new lending last week. After the halt, the Wall Street Journal reported that Genesis had until Monday morning to secure $1 billion in financing. Genesis has also publicly disclosed that it had $175 million in exposure to now-bankrupt FTX.
One result of this has been reflected in one of the more popular bitcoin-linked products, the Grayscale Bitcoin Trust GBTC . Bernstein analysts Gautam Chhugani and Manas Agrawal wrote in a Monday note that “crypto investors continue to speculate on a Genesis spillover to DCG and thus, potential strategic options on Grayscale, its most valuable business. Crypto investors also fear indirect reputation damages to GBTC from the recent leverage blow out between Genesis, Three arrows and Alameda.”
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