According to the Bitcoin billionaire, Digital Currency Group’s ongoing financial suffering will not put further pressure on crypto prices.
Bitcoin billionaire says there will be no selling pressure
Galaxy Digital Holdings CEO Mike Novogratz said his concerns about the crisis facing Digital Currency Group (DCG) and Genesis “wouldn’t involve a lot of sales”, albeit “not good news”.
In an interview with CNBC’s Squawk Box on January 10, Novogratz said he expects the current fiasco facing DCG and its related companies to ‘play out’ in the coming quarter. ‘There are some protrusions like DCG, Genesis and Gemini that will come out in the next quarter. It won’t be perfect,’ said Novogratz. he added.
DCG is a major crypto holding known as the owner and operator of Grayscale Investments, the world’s largest digital asset manager. He also owns corporate lending firm Genesis, consulting firm Foundry, crypto exchange Luno, and crypto media firm CoinDesk.
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It can affect the crypto market
Novogratz’s view is in stark contrast to Arcane Research’s January 4 report, which warned investors to be mindful of the ‘continuing financial distress’ in DCG, as the result could ‘importantly impact the crypto markets’. He argued that if DCG went bankrupt, the company could be forced to liquidate assets and sell large positions in the Grayscale Bitcoin Trust (GBTC) and other crypto-related trusts, which would put pressure on crypto prices.
However, Novogratz argued that both Bitcoin and Ether have remained “pretty stable” despite the “lots of terrible news” over the past few months and have even seen an increase in the past few days. “It’s a pretty clean market right now,” Novogratz said, referring to investors who have sold or reduced their leverage in recent months.
Alarm bells for DCG and Genesis first sounded late last year, after Genesis halted withdrawals on November 16, citing the “unprecedented market turmoil” caused by the collapse of FTX and Three Arrows Capital.
Co-founder stated that DCG did not pay its debts
Gemini co-founder Cameron Winklevoss stated in an open letter sent to DCG CEO Barry Silbert on January 2 that DCG-owned Genesis owes Gemini and DCG owns Genesis. He claimed that he did not repay the 900 million dollar loan he owed now.
On January 10, Winklevoss wrote a second letter, this time to DCG’s board of directors, arguing that Silbert and DCG were only acting as if they were filling a $1.2 billion gap in the Genesis balance sheet. He said Silbert was “unfit” to run the company and called for his dismissal with immediate effect.