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Bitcoin tumbles to fresh lows as Genesis denies imminent bankruptcy

Bitcoin briefly tumbled to its lowest level in two years on Monday after Bloomberg News reported that Genesis, the digital-asset brokerage and lender, has told investors it could be forced to file for bankruptcy if its current fundraising efforts are unsuccessful.

The price of bitcoin
BTCUSD,
+1.25%
tumbled to $15,615 on Monday after Bloomberg published its report, its lowest level since November 2020, according to CoinDesk.

A representative for Genesis downplayed the Bloomberg report in a statement shared with MarketWatch, which claimed that the company is continuing to have “constructive” conversations with creditors.

“We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors,” Genesis said.

Speculation has been mounting in recent days about financial issues being faced by Genesis, which halted redemptions and new lending last week. After the halt, the Wall Street Journal reported that Genesis had until Monday morning to secure $1 billion in financing. Genesis has also publicly disclosed that it had $175 million in exposure to now-bankrupt FTX.

Genesis has several businesses including lending, custody and trading in spot cryptocurrency and over-the-counter derivatives markets.

In recent days, there has been rampant talk in social media about more bankruptcies in the cryptocurrency space following the collapse of FTX. Some crypto industry insiders have been focused on Genesis’ ability to weather the crypto storm, several sources told MarketWatch.

One result of this has been reflected in one of the more popular bitcoin-linked products, the Grayscale Bitcoin Trust
GBTC,
-0.84%.

The trust, which is the only exchange-traded product in the U.S. with direct exposure to bitcoin (although an exchange-traded fund with exposure to bitcoin futures also trades), has sold off, causing its discount to the net asset…

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