Genesis is one of the largest companies in the Bitcoin and crypto space, and has this morning announced that they are to be entering into a chapter 11 bankruptcy filing, after many of the loans that they issued to various parties in the crypto space soured.
Many in the cryptocurrency space are lamenting the degree to which figures that love criminality and taking huge risk have been plaguing the cryptocurrency space over the course of 2022, and
The collapse is already priced in
One of the main reasons why the price hasn’t responded significantly to the news is the fact that the market has already priced it in.
After the collapse of FTX, it became obvious to investors that there would be a further series of collateral damage rippling across the industry, and the market prepared for this.
In a worst case scenario, DCG could choose to unwind some of the Greyscale Trust’s assets in order to reimburse some of their creditors, which would incur significant further selling pressure, depending on how it would be done – it could either be achieved by disbursing the Bitcoin held in the trust to creditors, or (as is traditional) liquidating the assets and disbursing the dollar value.
Sellers are exhausted
Furthermore, after well over a year of a brutal bear market, most sellers are already completely exhausted.
With each bear market, the hodlers become more hardened and determined, and those who hold throughout the bear market to make it to other side are well-equipped to deal with everything that could be thrown at them moving forward. Not only this, but with experience comes conviction, and as more Bitcoin is moved off exchanges and cold storage it becomes harder to suppress the Bitcoin price.
Ironically, implosions such as the aforementioned encourage a more responsible culture of self custody, which creates a market with healthier fundamentals moving forward.
The market is preparing for the halvening in 2024
There are many reasons why the markets ought to be bullish moving forward. One of these reasons is that the Bitcoin halvening is due to arrive in 2024, meaning that the block reward is to be cut in half.
The slashing of the block reward means that the potential selling pressure from miners is hugely diminished, which has historically been hugely bullish for the Bitcoin market.
Those who predict that history may rhyme, as with previous halvenings, are bullish and expecting that the price may rise into the Bitcoin halvening and appreciate in a more parabolic manner once the effects of the halvening begin to be felt.