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Genesis Trading is the Biggest Concern in Crypto

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@idiosyncratic1
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Genesis Trading has laid off 30% of its staff as a part of the solution to compensate for its losses from the exposure to FTX and Alameda Research. As you may know, the company is in trouble due to its insolvent situation. The crypto ecosystem is waiting for the declaration of bankruptcy.

The exposure to Genesis Trading also brought some trouble to Gemini (a popular centralized exchange). The popular twins of crypto (Winklevoss brothers) gave some time to Genesis to cover the money lent by Gemini as a product of Gemini Earn.

Obviously, the lending and earn mechanism in crypto is similar to the fractional banking system of fiat money. Though, this time, cryptocurrencies have max supply, the imaginary money is floating from one centralized exchange to another. When the music stops, there is no chair for customers...

Genesis Trading Holds $364m in Total

A popular crypto data tracking account, Lookonchain shared the wallets owned by Genesis Trading and the value of the assets owned by them.

Obviously, the big portion of the assets owned by Genesis consists of Ethereum and USDC. The number of the other tokens would not harm as much as it does to Ethereum. However, the collapse of Genesis Trading will inevitably affect the crypto ecosystem.

If the CPI in the USA exceeds the expectation of the FED members, then the markets would buy the narrative of higher interest rates for the upcoming terms. In this case, crypto ecosystem is likely to shrink even more. As the prices go down, we are likely to see more projects going insolvent and bankruptcies would happen.

As of writing, Silvergate (Trad-Fi), Huobi by Justin and Genesis Trading FUDs are strong enough to hit the market hard. Even though Huobi FUD is not as serious as the others, it is one more pain in the head. The sentiment has transmitted to negative from neutral for crypto ecosystem. The expectation of $13,750 for Bitcoin has started to be whispered by veteran traders.

The collapse of Genesis Trading will be as strong as Binance FUD if we are lucky. In the worst case scenario, we have no idea about the number of CEXs being exposed to Genesis Trading for their lending and earn operations. Assuming that there are 2-3 more CEXs being exposed to it, then the negative impacts may make us see below $10k for Bitcoin.

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