The cryptocurrency industry recently experienced a significant drop in overall market capitalization as prices plummeted over the weekend. This drop was especially noticeable because Bitcoinleading cryptocurrency by market value, fell below $60,000 on Saturday, August 3. Ethereum, the second-largest cryptocurrency, also suffered significant losses, falling below $3,000 and hitting a low of $2,860. This caused other cryptocurrencies to follow suit, most of which immediately turned red.
Such volatility is not uncommon in the cryptocurrency space, where prices often swing wildly in response to a variety of factors. These price swings are typically caused by the market reacting to recent news or events. In this case, the recent price declines can be attributed to repayment plans bCrypto lender Genesis Global Capital has gone bankrupt.
Genesis Moves $1.5 Billion In Crypto
Genesis Global Capital, the bankrupt cryptocurrency lending company, has finally completed its restructuring and is now paying off its debts to creditors after three years. According to According to Bloomberg, the lender has begun immediately paying out around $4 billion in cryptocurrencies and fiat currencies to creditors.
The distribution details indicate that Bitcoin creditors will receive 51.28% of their claims, Ethereum creditors will receive 65.87%, and Solana creditors will receive only 29.58% of their claims.
As such, Genesis moved more than $1.5 billion in Bitcoin and Ethereum on Friday, which sent a wave of market volatility into overdrive. According to on-chain data from Arkham Intelligence, the company moved a total of $1.5 billion, including 16,600 BTC (worth about $1.1 billion) and 166,300 ETH (worth about $521.1 million). Among the distinguished winners was billionaire Mark Cuban, who received $19.9 million in Ethereum repayments.
URGENT: GENESIS MOVES $1.5B BTC+ETH TO PAY CREDITORS
Over the past hour, wallets linked to Genesis Trading have moved 16.6k BTC ($1.1bn) and 166.3k ETH ($521.1m) – likely in the form of in-kind payments to creditors.
BTC: bc1qmetf6pu6ghr6fv92209sw5x9t5999562t8wmux
ETH:… photo:twitter.com/5Jtxqx8mxT— Arkham (@ArkhamIntel) August 2, 2024
Market reaction
As such, many investors seemed to react to the incoming influx of recent money by liquidating their holdings, which in turn contributed to the decline in the prices of many already struggling cryptocurrencies. The price decline can also be attributed to repaid creditors who decided to cash out their digital assets after a long three-year wait, increasing selling pressure and deepening the price decline.
The cryptocurrency market experienced a pointed decline, dropping by over 5.7% in 24 hours, which caused the market capitalization to fall to $2.15 trillion. As mentioned earlier, Bitcoin fell below $60,000, and Ethereum fell below $2,900.
Genesis Global Capital isn’t the only bankrupt crypto firm that’s been dealing with creditor repayments lately. Bankrupt Bitcoin exchange Mt. Gox has also been paying off creditors over the last few weeks. The market may continue to react to these gigantic fund moves as creditors receive their repayments.
Featured image from 123RF, chart from TradingView
