It appears that GBTC ETF outflows related to the liquidation of Genesis holdings have begun. Hence the shutdown of Bitcoin.
The Bitcoin ETF GBTC is in the news again
As we reported recently, the Gemini exchange won its case against the Genesis company concerning the ownership of 31 million shares in the Bitcoin ETF GBTC. The New York court’s decision should allow Gemini clients to recover some of their funds.
As a reminder, Genesis filed for bankruptcy in January last year following the collapse of investment fund Three Arrows Capital. As a result, the Gemini exchange – owned by the Winklevoss brothers – sued its former partner Genesis.
Genesis’ bankruptcy filing resulted in numerous disputes between Genesis, Gemini and Genesis’ parent company, Digital Currency Group (DCG). One of the disputes concerned the ownership of shares in the GBTC ETF provided as security for loans granted to Genesis under the “Earn” investment program.
Here are the latest statements from Gemini on his blog:
“We will return over $1.8 billion (at today’s prices), which is $700 million more than when Genesis stopped withdrawals on November 16, 2022. […] Earn program users can expect to receive approximately 97% of their assets within approximately two months. »
After more than a year of waiting, the 100,000 customers of the Gemini exchange will therefore review the color of their bitcoins.
However, these 31 million shares (~30,000 bitcoins) will be paid in the form of greenbacks. ETFs are not permitted to pay out bitcoins directly upon liquidation of units.
In other words, the settlement of the dispute will automatically initially trigger sales of bitcoins. Note that the liquidation also concerns the equivalent of $200 million in ETH.
And given the recent resumption of outflows from the GBTC ETF, it appears that selling has begun:
Outflows from the GBTC ETF totaled $600 million on Thursday. There have only been two slightly worse days since ETFs launched. These outflows completely offset inflows into the BlackRock ETF. This resulted in a halt to the rise of bitcoin.
The latter, however, remains above $60,000, a threshold found for the first time in more than two years. We are even at an all-time high against the euro.
We should probably expect bitcoin to tread water a bit over the next few days. He will certainly resume his march forward very quickly. Especially if Gemini customers immediately redeem bitcoins.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
