How a key dispute plays out may well determine the fortunes of crypto through the early part of 2023, says an industry watcher.
The upheaval in the world of crypto is showing no signs of petering out in the new year. Cameron Winklevoss, the co-founder of crypto exchange Gemini Trust, accused Barry Silbert’s Digital Currency Group of bad-faith tactics in a dispute over $900 million of frozen funds.
The New York firm Messari has released its annual outlook for the crypto industry, but we’ll focus for now on what Ryan Selkis’s team is saying about this particular dispute, which it says is the most important trend in early 2023 to keep an eye on. But there’s some big open questions. One is whether DCG or Genesis own $700 million worth of Grayscale Bitcoin Trust GBTC and the Grayscale Ethereum Trust ETHE . If it’s DCG, that’s a big asset to borrow against, but if it’s already spoken for at Genesis, “we might yet see a further rippling out of contagion.”
The outlook at DCG will have a big impact on the Grayscale Bitcoin Trust. “A buyer without a large GBTC bag would have every incentive to shut down ETF conversion discussions and run the business as an annuity that’s openly hostile to GBTC shareholders,” says the Messari report. “Even though an ETF would open the door for redemptions and lower fees, DCG would notch a one time gain of $450 million from the closure of the GBTC discount to NAV.
For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily. Damar Hamlin of the Buffalo Bills suffered a cardiac arrest on the field, as the NFL suspended the Bills-Bengals game. He’s sedated and in critical condition, the Bills said.
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