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These Altcoins Are At Risk as Fear Of Grayscale’s Liquidation Gets Stronger

Author: Sohrab Khawas

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    Story Highlights
    • Gemini cofounder pressurizes DCG for settlement

    • Bitcoin Trust liquidation under threat if Grayscale decides to liquidate

    The Digital Currency Group (DCG) has come under scrutiny after Zhu Su, the founder of Three Arrows Capital, accused DCG and FTX of causing the decline of Terra (LUNA) and STETH and ignoring the issue instead of addressing it. In addition, Cameron Winklevoss, co-founder of Gemini, has written an open letter to DCG CEO Barry Silbert alleging that Genesis and its parent company, DCG, owe $900 million to Gemini customers. 

    It is known that DCG is the parent company of Grayscale, which is facing a decline following the collapse of FTX. This has caused concern in the crypto community that Grayscale may liquidate some of its trust funds to cover the debts of Genesis creditors, starting with low-performing altcoin trusts.

    https://twitter.com/karl_0x/status/1609931432742338563?s=20&t=8TZUPG0jH-mfAakKl7p2OQ

    The Bitcoin Trust

    According to the data, Grayscale holds approximately 8.5% of the total Ethereum Classic market capitalization. If Grayscale decides to liquidate ETC, there is a high probability that the value of the currency will significantly decrease. 

    In addition to ETC, Horizen ZEN and Zcash may also suffer significant losses, as Grayscale holds 4.6% and 2.5% of their market capitalizations, respectively. 

    However, the larger concern is the potential liquidation of Grayscale’s BTC trust, which holds approximately $10.5 billion BTC, or 3.3% of the total market capitalization. Similarly, Grayscale holds 3 million ETH, representing 2.5% of the total market capitalization. 

    As the situation may worsen, crypto investors and traders are hoping that the liquidation of these trusts can be avoided.

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