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Genesis Bankruptcy News: Has Bitcoin (BTC) Already Been Priced?

  • Bitcoin (BTC) has shown strength and confidence since Genesis' bankruptcy declaration.

  • Genesis Global's Chapter 11 bankruptcy filing didn't affect Bitcoin's price.

21 Jan 2023 By: Anirudh Trivedi
Genesis Bankruptcy N

The much-anticipated announcement of Genesis' bankruptcy has 

Not yet affected the price of Bitcoin (BTC), which is currently exhibiting signs of strength and confidence.

The announcement that cryptocurrency lender Genesis Global filed for Chapter 11 bankruptcy protection had little effect on the price of Bitcoin (BTC). The market may have already moved past the bankruptcy news, as seen by the sustained strength at the present price level. You might remember that over the past few months, there has been a lot of talk about Genesis' potential bankruptcy. It had almost seemed as though Genesis would follow FTX into bankruptcy ever since.

Intriguingly, the most recent relief rally and the recovery of the BTC price since the start of 2023 represent one of the longest such pumps in the annals of Bitcoin. Comparing January 1 to today, the leading cryptocurrency increased by as much as 27%.

Bitcoin and U.S. Dollar Correlation

The US dollar is still at a seven-month low on concerns about a potential US economic downturn. The U.S. Dollar Index (DXY) is down almost 12% from its recent peak of 114 in September 2022. The price of Bitcoin (BTC) has continued to show an inverse relationship with DXY. In this scenario, the recent increase in the price of bitcoin is justifiable, especially since there are no indications that the macroeconomic environment would improve soon. According to CoinGabbar, the price of one bitcoin is currently $21,128 and has increased by 2.12% during the past day.

DCG Scenario for Genesis

The cryptocurrency market appeared to have taken into account the impending news in light of the FTX collapse in November 2022, possibly as a result of the protracted speculation around Genesis insolvency. Genesis Global has submitted a Chapter 11 bankruptcy petition to the federal court in Manhattan on Thursday. The Digital Currency Group (DCG), which is trying to find a potential buyer for its media business CoinDesk, now has it harder. Given that the GBTC discount has now reached 40.45%, the Grayscale Bitcoin Trust, which is also controlled by DCG, is under tremendous pressure.

More crucially, it is unclear whether the Genesis bankruptcy and potential worsening of the DCG problem will result in other countries taking a stricter regulatory approach.