DCG (Digital Currency Group) – the crypto company that owns Grayscale – is allegedly $2 billion in debt, giving traders and crypto analysts a lot to be anxious about.
DCG Is Allegedly Dealing with Tons of Debt
Barry Silbert – the man who founded DCG – stated in an interview:
We have weathered previous crypto winters. While this one may feel more severe, collectively we will come out of it stronger.
The goal was to try and calm people’s nerves, though this is easier said than done given that this crypto bear run appears to be unlike anything the space has ever experienced or seen before. Right now, bitcoin – the world’s number one digital currency by market cap – has lost more than 70 percent of its overall value.
In November of 2021, for example, the currency rose to a new all-time high of about $68,000 per unit. However, since then, the currency has fallen into the mid-$16K level. Many other digital currencies have followed suit and the space has lost more than $2.2 trillion in overall valuation. It’s a sad, and above all, scary sight to see; one that puts many investors in a state of harsh worry.
The news regarding DCG was first brought to light on Twitter by crypto commentator TradFiWhale, who reported:
DCG’s Grayscale business is extremely valuable. DCG doesn’t want to fire sale this, so, they will likely let Genesis go under. Genesis likely filing for bankruptcy. I think creditors will eventually get most of [the] money back, and DCG will survive with a black eye and marred reputation.
In response to the news getting out, DCG issued its own tweet trying to bring people’s concerns to a lower position. It wrote:
The impact lies with the lending business at Genesis and does not affect Genesis’ trading or custody businesses. Importantly, this temporary action has no impact on the business operations of DCG and our other wholly owned subsidiaries.
Not long ago, Silbert went onto a podcast to try and shed light on the situation. He was asked by the podcast host if Genesis was going to take “cryptocurrency down.” Silbert responded with:
Despite the difficult industry conditions, I am as excited as ever about the potential for cryptocurrencies and blockchain technology over the coming decades, and DCG is determined to remain at the forefront.
FTX to Blame?
The entire crypto space has been suffering since the beginning of 2022. However, things allegedly got a lot worse when last November, golden child FTX – long considered one of the best and most popular digital currency exchanges in the world – fell into oblivion.
The company experienced a sudden liquidity crunch that saw it seeking aid from rival Binance. When the latter refused to help, the company was forced into bankruptcy and its head executive (Sam Bankman-Fried) resigned from his post.
Source: https://www.livebitcoinnews.com/report-crypto-firm-dcg-is-contending-with-tons-of-debt/