Bitcoin Drops Below $16K as Lender Genesis Faces Bankruptcy By

© Reuters

by Ambar Warrick – Bitcoin and the broader cryptocurrency market came under renewed selling pressure on Tuesday after crypto-focused investment bank Genesis signaled a potential bankruptcy risk due to its recent exposure to insolvent exchange FTX.

It sank 3% to $15,787.4 by 18:47 EST (23:47 GMT), after falling to $15,504 – a new two-year low – earlier in the day. world no. 2 crypto fell 3% to $1,108.81, bringing its total losses this month to nearly 30%.

In the latest casualty of this year’s cryptocurrency crash, Genesis Global Trading, one of the largest institutional lenders in the space, has reportedly warned that it could face potential bankruptcy if it is unable to raise new funding. The bank is said to be seeking up to $1 billion in new funds, but has yet to find a source.

But the company said it had no plans to declare bankruptcy “imminently”. It reportedly reached out to major exchange Binance and private equity firm Apollo Global Management (NYSE:) for funds.

The report comes just a week after withdrawals at Genesis’ lending arm were suspended, as concerns about its exposure to FTX sent a frenzy from banks.

Reports earlier this year showed that Genesis had several loans owed to Alameda Research – the cryptocurrency trading desk that has been closely linked to the FTX bankruptcy. It also reportedly lost money through its exposure to hedge fund Three Arrows Capital, which went bankrupt earlier this year.

Fellow cryptocurrency lender BlockFi filed for bankruptcy earlier this month, while many smaller players have suspended withdrawals or shut down some lending and storage services, as contagion from the FTX crash continues to spread.

Amid intense jitters towards the space, total cryptocurrency capital has fallen below $800 billion, with many altcoins experiencing extended losses. It fell 3.4%, while memecoin fell 2.1%.

Recent data shows that institutional investors are piling heavily into products selling cryptocurrencies in anticipation of further losses. The full impact of FTX’s bankruptcy has yet to be felt, given that the exchange was at one point the second largest in the space.

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