Grayscale Bitcoin Trust Recovers as Genesis FUD Dissipates
The premium rate of Grayscale Bitcoin Trust (GBTC) has recovered from 46% to 40%.
The recovery came as institutional investors including Cathie Wood buys GBTC shares.
Grayscale Bitcoin Trust premium rate rebounds from
46% to 40% as Cathie Wood's Ark Invest purchases GBTC shares, restoring faith in the cryptocurrency market.
Meanwhile, Binance has allocated more than $2 billion in BUSD to its Industry Recovery Initiative in order to assist projects in recovering from liquidity challenges caused by the collapse of the crypto exchange FTX.
Will the Crypto Market Recover From FTX and Genesis FUD?
Cathie Wood's Ark Invest purchased GBTC shares twice in a week when the GBTC premium rate plummeted to 46%. On November 15, Cathie Wood purchased 315,259 GBTC shares, and on November 22, she purchased 176,945 GBTC shares.
As the premium rate falls to 40%, GBTC purchases have restored institutional investors' faith in the Grayscale Bitcoin Trust. The GBTC premium rate plunged to a record 46% when the FTX contagion extended to its sister trading business Genesis. Digital Currency Group owns both Genesis and Grayscale.
DCG and Genesis are currently seeking $500 million in emergency funding, having reduced their original request of $1 billion due to difficulties in raising it. Meanwhile, regulators such as the Alabama Securities Commission are looking into Genesis Global Capital to see if it violated securities laws.
While Grayscale has denied giving proof of reserves for its Grayscale Bitcoin Trust (GBTC), rumors indicate that GBTC has almost 633K Bitcoin in Coinbase Custody. Some speculate that the company may dissolve GBTC and ETHE in order to repay their lenders.
The cascading effect of FTX is decreasing as the crypto market rises higher. While Bitcoin remains in doubt, altcoins are on the rise.
Binance Industry Recovery Initiative
The crypto market has also recovered as a result of Binance's Industry Recovery Initiative. The CEO of Binance, "CZ," has pledged $2 billion in BUSD to the Industry Recovery Initiative. Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group also contribute $50 million.
Several crypto exchanges providing proof of reserves have also contributed to some bullish mood as whales purchase the drop. Bitcoin is currently trading at $16,568, an increase of roughly 1% in the last 24 hours. Ethereum, on the other hand, has increased by more than 3%, with the current price trading at $1,218.
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