Cryptos suffer on speculation of a possible Genesis bankruptcy
By Nieves Amigo
Date: Tuesday 22 Nov 2022
(Sharecast News) - Cryptocurrencies continue with their particular ordeal due to all the consequences of the FTX bankruptcy. In the market there is insistent speculation about the possible bankruptcy of digital asset broker Genesis, and that is contributing to Bitcoin and Ethereum falling further. The former is now trading below $16,000 ($15,664) and the latter below $1,100 ($1,085).
Genesis is struggling to raise money for its lending unit and is warning potential investors that it may have to file for bankruptcy if its efforts fail, as people with knowledge of the matter reported to 'Bloomberg'.
'Bloomberg' added that the cryptoasset firm spent the past few days seeking at least $1 billion in capital, which includes talks of a possible investment from cryptocurrency exchange Binance. The rush for funding was precipitated by a liquidity crisis at the lender following the sudden collapse of FTX.
However, Genesis denied an imminent bankruptcy to 'Cointelegraph'. A spokesperson said there are no plans to file for bankruptcy "imminently" and that they are still in "constructive" talks with creditors.
"We could see Bitcoin fall to $12,000," warned Ipek Ozkardeskaya, an analyst at Swissquote, in his Tuesday market commentary.
"News that another cryptocurrency exchange, Genesis, needs a $1 billion capital injection shows how interconnected everything is in this cryptocurrency world," Neil Wilson, director of analytics at Markets.com, added.
That said, Wilson qualifies that whatever happened with FTX or what may happen with any other platform "is not a problem with cryptocurrencies, but with individuals and corporations that failed to use the right measures and the right practices out of sheer dishonesty and greed."
"The problem is not with the space, as it is still very flourishing, and the value that Bitcoin provides has not and will not change. However, confidence in the industry has certainly been shaken, and this is not a positive thing for now. Traders should keep an eye on Genesis and other brokers, which could also come out of the closet and seek more capital. Another FTX-like failure could further damage sentiment and, as a result, could drive Bitcoin´s price to break $15,000," he warned.
This article was translated by: Alejandra Zamora
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