Free_Willy🏴‍☠️
Free_Willy🏴‍☠️ 4 minutes reading from Bitcoin

A Full Story on Grayscale, ICO, and Where We’ll Go From Here

Quick thread on Grayscale DCG and Genesis

A full layman explanation on what’s happening, where we are, what the concern is, etc.

For people who haven’t followed.

Btc BTC Eth Eth crypto cryptocurrency Cryptomarket Coinbase Coin GBTC CryptoInvestor Matic Bitcoin

Grayscale hold a massive amount crypto on Coinbase. Investors gave Grayscale their BTC in exchange for GBTC, which is currently -45% the value of that BTC.

Now, after the FTX collapse, many crypto companies are on the verge on bankruptcy. And most if not all, are being asked for ‘proof of reserves’ on the blockchain, ie physical evidence they hold what they say.

So the next part of Genesis, which is a large crypto company, owned by DCG (who also own Grayscale). Genesis recently announced they need a 1 billion dollar loan to stay afloat after FTX.

If Genesis goes down, it’ll be another cascading effect on the whole industry like FTX, leading more companies to go bust and so on, so it’s in DCGs best interest to be bailing Genesis out

But they aren’t, at least not yet. (Don’t hold your breath though)

Consensus is that DCGs biggest company, Grayscale haven’t shown transparency, leading people to believe they’ve been doing shady things with their BTC reserves.

One of the main reasons people think this is that they refuse to show their cold wallet addresses for their crypto assets, which is very suspicious. They also aren’t showing us their liabilities (debt), also a bit of red flag.

If DCG is letting Genesis go down, it further leads to the idea they have a massive liquidity crisis going on.

Because technically DCG & Grayscale could offload GBTC and bail Genesis out, which would stop further companies in the space imploding, if they do crash, it would lead to a decrease in value of their crypto assets. So it makes sense.

The fact they aren’t, and aren’t willing to show proof of reserves on the blockchain is worrisome.

The last twist in the story is Coinbase.

Coinbase apparently hold Grayscales Assets. They’ve confirmed today that they are there in full, with a ‘trust us’ statement similar too what Grayscale said last week.

The problem is again that with no addresses released, people are less likely to believe Coinbase, who has a very bad reputation the last year, with a lot of people thinking it’s heading towards bankruptcy itself.

All of this has impacted the price of BTC, GBTC, Coin and all the crypto industry pretty much, as users push for transparency in a post FTX world.

I suspect big price moves

won’t happen until these issues have been laid to rest, for better or worse.

This post is based on this twitter thread.

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