This Company Wants to Sell $1.40 Billion in Bitcoin: Price Impact

Bankrupt crypto lender Genesis has asked a US judge to sell a staggering $1.6 billion worth of crypto assets.

Market participants are speculating how the price of Bitcoin might react if Genesis receives approval for the sale.

Genesis sells $1.60 billion in crypto

According to the court filing, the proposed sale includes significant holdings in Bitcoin (BTC), Ethereum (ETH), and Ethereum Classic (ETC). These assets are currently available in Greyscale's Trust products.

This move resulted in a significant drop in the price of Bitcoin following FTX's divestment of over $1 billion in GBTC holdings.

Genesis holds most of its assets, approximately $1.40 billion, in the Greyscale Bitcoin Trust (GBTC), now a Bitcoin exchange-traded fund (ETF). The rest are owned by Grayscale Ethereum Trust and Grayscale Ethereum Classic Trust, valued at $169 million and $38 million, respectively. The crypto lender plans to liquidate these assets to fund in-kind distributions to lenders.

“Because the debtors have the ability to monetize the trust assets and convert those funds into capital assets with the intent of making in-kind distributions to creditors as much as possible (and making cash distributions where in-kind distributions are not possible), it would be more efficient and economical for the debtors and their estates,” the court filing reads.

Genesis is closely tied to a large Digital Currency Group (DCG) network, including Grayscale. Interestingly, after a difficult year for the crypto sector in 2022, this relationship faced scrutiny.

In the year In 2022, the collapse of major players took a heavy toll on Genesis, leading to bankruptcy. The situation badly affected Gemini, her biggest creditor. In fact, over 100,000 users of the Gemini Earnings program have felt the impact.

The impact of the price of Bitcoin in the middle of the sell-off

The potential market implications of this massive Bitcoin selloff are profound. Analysts are closely monitoring Bitcoin's price movements. Again, from a technical perspective, an inverse head and shoulders pattern has formed on the daily chart, with the neckline located around $43,500.

This pattern, often seen as a bullish indicator, suggests a possible 13.5% price rally if accompanied by a breakout with high trading volume. Yet, the $49,000 level is expected to serve as a formidable resistance zone for Bitcoin.

Read more: Bitcoin price prediction for 2024/2025/2030

It is worth noting that if the increased selling pressure from Genesis prevents Bitcoin from going above the $43,500 neckline, the bullish will be rejected. Such a scenario would instead trigger a price correction of about $40,000.