What's Going On With Grayscale Bitcoin Trust (GBTC) Today?

What's Going On With Grayscale Bitcoin Trust (GBTC) Today?

Grayscale Bitcoin Trust GBTC shares are falling Wednesday after cryptocurrency broker Genesis Global Capital announced it's suspending redemptions and new loan originations at its lending business.

What Happened: FTX, along with related trading firm Alameda Research and approximately 130 affiliated companies filed for Chapter 11 Bankruptcy last week following the collapse of the FTX Token FTT/USD and the unraveling of FTX CEO Sam Bankman-Fried.

In the wake of the FTX collapse and the default of Three Arrows Capital (3AC), Genesis Global Capital ran into liquidity problems. 

"The default of 3AC negatively impacted the liquidity and duration profiles of our lending entity Genesis Global Capital. Since then, we have been de-risking the book and shoring up our liquidity profile and the quality of our collateral," Genesis said via tweet.

"However, FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity."

Related Link: Genesis Crypto Lending Unit Halts Customer Withdrawals On Heels Of FTX Bankruptcy

Why It Matters: Grayscale and Genesis are both owned by the same parent company, Digital Currency Group. The Bitcoin BTC/USD Trust was designed to give investors a way to gain exposure to bitcoin in the form of a security while "avoiding the challenges of buying, storing, and safekeeping BTC." 

Grayscale took to Twitter Wednesday morning to ease investor concerns, but it doesn't appear to be working. 

"In the wake of recent events, our investors should know that the safety and security of the holdings underlying Grayscale digital asset products are unaffected," Grayscale said.

GBTC Price Action: The Grayscale Bitcoin Trust has a 52-week high of $48.44 and a 52-week low of $8.43.

It was down 1.4% at $8.83 on Wednesday. Bitcoin was down 2.66% at $16,522 over the last 24 hours. 

Photo:  Eivind Pedersen from Pixabay.

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