BlocksInform
After a long back-and-forth, the Genesis and DCG drama appears to be coming to a relatively smooth end after Genesis reached an agreement with DCG and other creditors yesterday – but a price crash could be looming as DCG is forced to sell shares in its Grayscale Bitcoin (GBTC) and Ethereum (ETHE) Trusts.
After a long coming and going, The dramatic Genesis and DCG seem to reach a relatively peaceful end after Genesis made a deal with DCG and other creditors yesterday – but we may see a price drop as DCG is compelled to sell equities in its Grayscale Bitcoin (GBTC) and Ethereum (ETHE) trusts. Sales are aimed at raising capital to pay the creditors of the genesis negotiation bankruptcy.
Bitcoin & ethereum impending crash?
The information is based on U.S. securities records seen by the news outlet. From their perspective, Confidence in the Grayscale ether is currently at the centre of dcg's attention, where the group has sold approximately one-quarter of its shares in a number of transactions since January 24, generating approximately $22 million.
It sells approximately $8 per share, although each share is entitled to $16 in ether. "This is just part of our portfolio restructuring in progress," dcg said.
GBTC, which holds 633,000 Bitcoins, appears to be untouched so far. At the moment it is not clear whether dcg is also considering selling its shares in order to increase its liquidity. Dcg purchased close to $800 million in Gbit stock between March 2021 and June 2022, with a view to avoiding a further increase in the discount because of insufficient demand.
The company owns approximately 9.67% of the outstanding shares in the trust. In the event that DCG needs to raise more cash, selling these shares may seem like an option. However, their sale could have a major impact on the nav haircut of 43.08%.
However, their sale could have a major impact on the NAV haircut, which has already reached 43.08%. Without such approval, selling bitcoin confidence grayscale would take about 2.5 years for dcg to sell its entire shares.
A couple of years from now. It depends to whom the shares of the Bitcoin and Ethereum trust are sold and under what conditions – if dcg allows redemptions to provide au pair liquidity.
An early warning of a bitcoin and ethereum price crash would be premature.
A warning of a collapse in Bitcoin and Ethereum prices is therefore premature.
It is also interesting to note that DCG has initiated "bulk" share sales within its Litecoin Trust, Bitcoins Cash Confidence, Ethereum Conventional Trust and Digital Large Cap Fund, the report states.
Yesterday, it became known that Gemini has reached an agreement in principle with Genesis, DCG and other creditors on a plan that will provide Earn users with a path to recovering their assets. This initiative will also see Gemini donate up to $100 million to win users.
In accordance with the terms of the agreement, dcg would also exchange its $1.1 billion note maturing in 2032 for convertible preferred shares issued by dcg. In addition, dcg would refinance its current 2023 term loans with a new two-tranche secured second term loan payable to creditors for a total of $500 million.
One of the indeterminate data elements is the value at which the preferred shares will be transferred to dcg's equity. According to past knowledge, the new dcg package will ensure that creditors will recover over 80% of the funds.
Based on past experience, the new DCG package will ensure that creditors recover more than 80% of the funds.
