According to the Bitcoin billionaire, Digital Currency Group’s continued financial woes will not put further pressure on crypto prices.
Bitcoin billionaire says there will be no selling pressure
Galaxy Digital Holdings CEO Mike Novogratz said fears about the crisis facing Digital Currency Group (DCG) and Genesis “won’t involve a lot of sales”, albeit “not good news”.
In an interview with CNBC’s Squawk Box on January 10, Novogratz said he expects the current fiasco facing DCG and its related companies to ‘play out’ in the coming quarter. ‘There are some highlights like DCG, Genesis and Gemini that will be revealed next quarter. It won’t be great,’ said Novogratz, then ‘I don’t think there will be a lot of sales, that’s not good news.’ he added.
DCG is a major crypto holding known as the owner and operator of Grayscale Investments, the world’s largest digital asset manager. He also owns corporate lending firm Genesis, consulting firm Foundry, crypto exchange Luno, and crypto media firm CoinDesk.
It can affect the crypto market
Novogratz’s view is in stark contrast to Arcane Research’s January 4 report, which warned investors to be mindful of the ‘continuing financial distress’ in DCG, as the result could ‘severely impact the crypto markets’. He argued that if DCG went bankrupt, the company could be forced to liquidate assets and sell large positions in the Grayscale Bitcoin Trust (GBTC) and other crypto-related trusts, which would put pressure on crypto prices.
However, Novogratz argued that both Bitcoin and Ether have remained “pretty stable” despite “a lot of bad news” over the past few months and have even seen an increase over the past few days. “It is a pretty clean market right now,” Novogratz said, referring to investors who have sold or reduced their leverage in recent months.
Alarm bells for DCG and Genesis first began ringing late last year, after Genesis halted withdrawals on November 16, citing the “unprecedented market turmoil” caused by the collapse of FTX and Three Arrows Capital.
Co-founder stated that DCG did not pay its debts
As we mentioned earlier as Kriptokoin.com, Gemini co-founder Cameron Winklevoss, in an open letter sent to DCG CEO Barry Silbert on January 2, stated that DCG-owned Genesis owes Gemini and DCG owns He claimed he had not yet repaid the $900 million loan he owed to Genesis.
On January 10, Winklevoss wrote a second letter, this time to DCG’s board, claiming that Silbert and DCG were only pretending to fill a $1.2 billion gap in the Genesis balance sheet. He said Silbert was “unfit” to run the company and called for his dismissal with immediate effect.