Genesis Trading is a firm that provides the backbone infrastructure of the institutional investor base in the bitcoin and broader crypto markets. The provide services for lending, trading, hedging, exchange yields. Those yields from the BlockFi and Gemini Earn products were all facilitated by Genesis which acts as the middleman between those platforms and hedge funds to generate the yield.
Reports say Genesis held a client call to announce the suspension of redemptions, withdrawals and new loan originations. The reason was their exposure to FTX and Alameda Research, the company now needs another liquidity injection after having nearly $175 million locked in a trading account with FTX. Parent company Digital Currency Group (DCG)injected $140 million into the business, but Genesis is now looking for more capital. For all the Gemini users this is why Gemini Earn had to halt withdrawals.
Gemini has been vocal that the rest of their operations are working fine, but limiting the Gemini Earn product has many spooked. Any exchange that is halting product, having service outages, and not being fully transparent will cause panic. The panic sparks runs on the exchange were user rush to get bitcoin off the exchange. For Gemini they have seen a 13% drop of BTC held on their exchange since the news started to drop. I'm a firm believer that exchanges are not the place for your crypto. If there’s a high probability that there is another exchange (or even multiple) left to fall you don't want to get caught without your keys.
So what i'm watching tonight is the price action and to see if Genesis gets their $1 billion liquidity injection by tomorrow. The scope of money tied up is enormous. Genesis has been caught in the line of fire and has already filed a $1.2 billion claim against Three Arrows Capital that was picked up by DCG to keep the hit off Genesis’ books. We knew Genesis had tons of interactions with Alameda, Gemini and BlockFi through their OTC trading desk. What we don't know the extent of the exposure and capital needed to make customers whole. I'd be carful with your coins and make sure you limit the risk of any positions. If you have free capital we are getting to the point where it might be good to start deploying it if things get ugly.
Posted Using LeoFinance Beta
Tough times to live in for sure
With the liquidity issue here and there we need to make everything possible to move all our funds from exchange.
Posted Using LeoFinance Beta
It's a two fold problem because as people pull there money it makes a snow ball effect and creates even more of a liquidity issue.
The coffeezilla video talked about this a little bit and it seems like it was already still hurting from the UST and 3 arrows capital. Then FTX ended up blowing up even more of the liquidity that they need. However, I wonder how things will go and if they will be willing to sell GBTC to cover up the liquidity.
Posted Using LeoFinance Beta
Well the price action has been pretty depressing today. The bear is in full control. I want to be greedy while others are fearful, but I'm not sure we have bottomed yet.
I don't think we have bottomed yet due to the FTX issues. From what I see, we might need to wait a while longer until we see how many companies got impacted by it.
Posted Using LeoFinance Beta
Genesis is not looking to good now. It's difficult to get the liquidity needed in these market conditions. I be surprised if they can achieve the target !
It will be bad for the market if they don't. I'm worried as my portfolio is wrecked. 2022 has been my worst trading year.
The Genesis company is playing a huge role in trading. Where this whale injects 1 billion money will swell.
It's crazy to be these companies were not prepared or have oversight. I can't believe it has gotten this bad.
If this issue is not deal with, people might begin to lose faith in genesis
For sure which brings into question a lot more big fish...