The potential mass liquidation of Bitcoin by Genesis Trading is casting doubt on the recovery of the cryptocurrency's price.
Genesis Trading, a cryptocurrency trading platform currently in bankruptcy proceedings, is moving its Bitcoin assets to the crypto exchange Coinbase.
According to data from Arkham Intelligence, Genesis Trading has moved 12.600 bitcoins, worth approximately $720 million, from its BTC wallets to the exchange platform to date.
These moves come two months after the New York Attorney General's Office approved Genesis Trading's bankruptcy plan, which is triggering a new wave of concerns about BTC price stability in the market. According to analysts, the recent recovery of the leading cryptocurrency could be affected by the possible liquidation of assets from this platform.
Genesis moves another 600 bitcoins
According to recent data from Arkham, Genesis Trading has transferred 600 BTC to the exchange. At the time of the transaction, these bitcoins were worth approximately $37,7 million USD.
However, this latest transaction by the platform is just the tip of the iceberg. In the past month, Genesis Trading has has moved a total of 12.600 BTC to the aforementioned exchange, which is equivalent to around $720 million dollars, according to the current price of BTC on the market.
Genesis has been moving between 500 and 700 BTC in each trade over the past month, in what are presumed to be moves in line with its bankruptcy reorganization plan, which was approved in May of last year. The plan authorizes the platform to liquidate and distribute its assets to meet creditor claims.
The above makes Genesis Trading’s bitcoin transactions particularly alarming for the cryptocurrency market, given the magnitude of assets still held by the platform. According to Arkham’s monitoring, Genesis Trading still holds significant cryptocurrency reserves, including 32.256 BTC and 113.604 ETH, worth a combined value of approximately $2.400 billion. If all of this crypto asset value is liquidated to meet the platform’s obligations, Bitcoin and Ethereum prices could face severe downward pressure, ultimately impacting the current recovery of the broader market.
Bitcoin price rose 12% in the last week
Genesis Trading’s Bitcoin moves come at a critical time for the cryptocurrency, which has seen its price rise by more than 12% over the past week. According to data from CoinMarketCap, the price of Bitcoin has seen a significant rally, currently trading above $64.000 per BTC.
In the last 24 hours, the bitcoin price has increased by 5,7%, while the market capitalization of this cryptocurrency stands at $1,28 trillion.
Source: CoinMarketCap
While the price of Bitcoin and cryptocurrencies has been recovering this week, and seasoned traders like Peter Brandt are predicting a more significant recovery in the coming months, the potential mass liquidation of Bitcoin and Ether by Genesis Trading introduces an element of uncertainty into the current optimistic outlook for the crypto market.
On the other hand, it is important to note that, despite these concerns, Bitcoin has shown some resilience to similar events, such as what happened with the massive sell-off carried out by Germany, in which the price of Bitcoin corrected by around 20%.
Analysts suggest that the impact these liquidations could have on the price of BTC will depend on several factors, including the speed at which Genesis Trading decides to sell its holdings, as well as overall market conditions at the time of the sales and the response of other large Bitcoin holders.
