By Richard Hines
The cryptocurrency market has been experiencing the intense heat of the crypto winter for the past 12 months, with companies reporting losses of billions of dollars and a loss of more than $1 trillion in total market capitalization.
Reports show there might be more catastrophe ahead for the crypto market if Digital Currency Group suffers liquidation.
More Catastrophe For The Crypto Market?
However, reports indicate that there is still impending doom for the cryptocurrency industry this year, and it will be very severe for businesses and investors.
A well-known case in the cryptocurrency industry involves Digital Currency Group (DCG) , which was recently charged with owing money to the now bankrupt lending company Genesis Global.
Genesis Global is only one of the numerous businesses that were terribly affected by the FTX collapse in October; as a result of this catastrophe, this business suffered financial losses and went bankrupt.
After the FTX crash, one of the Digital Currency Group’s companies, Genesis Global, went bankrupt. However, there have been numerous concerns raised about what will happen to the other DCG subsidiaries.
It is said that these subsidiaries contain significant amounts of Bitcoin and other assets, and if they were to be liquidated, the market would be completely thrown into shambles.
DCG’s Bankruptcy Will Be Disastrous
It would be disastrous for the cryptocurrency market if Digital Currency Group gets liquidated since that would force investors to liquidate sizable holdings in Grayscale trust.
However, attitude and morale among investors declined after Barry Silbert, CEO of DCG, was accused by Gemini co-founder Cameron Winklevoss, stating that Silbert subsidiary company, Genesis Global owed Gemini $900 million.
This fund was targeted to be used in the Gemini Earn trust offering program Gemini conducted with its investors.
Winklevoss called Silbert out on Twitter for this debt; however, there were no recorded threats to pursue or sue him if he totally ignored this accusation.
The two founders engaged in a Twitter back and forth in response to these accusations.
The DCG-affiliated companies have not been doing well either; after the FTX bankruptcy filing and liquidation, there had been a significant outflow from the companies.
If a prompt solution is not proposed, this liquidity situation could trigger another market crisis for the cryptocurrency community.
Since the beginning of 2022, the market capitalization dropped from its all-time high of $3 trillion to $800 billion.