Genesis, one of the biggest companies in the bitcoin and crypto industry, announced this morning that it will file for Chapter 11 bankruptcy protection after making numerous loans to various players. of the crypto industry.
Many in the cryptocurrency space are lamenting that personalities who love crime and big risk taking have poisoned the cryptocurrency space in the year 2022.
The collapse is already taken into account
One of the main reasons why the price has not reacted significantly to the news is the fact that the market has already priced it in.
After the collapse of FTX, it became apparent to investors that there would be another round of collateral damage rippling through the industry, and the market prepared for it.
In the worst case, DCG could choose to liquidate part of the Greyscale Trust's assets in order to pay off some of its creditors. This would cause significant additional selling pressure depending on how the refund would be made. It could be achieved either by distributing the bitcoins held in the trust to the creditors or (as is the tradition) by liquidating the assets and distributing the dollar value.
Sellers are sold out
Also, after well over a year of a brutal bear market, most sellers are already completely exhausted.
With each bear market, holders become more hardened and determined, and those who hold out through the bear market to get to the other side are well equipped to deal with whatever may befall them in the future. Additionally, with experience comes conviction, and as more and more bitcoins are removed from exchanges and cold stores, it becomes more difficult to suppress the price of bitcoin.
Ironically, implosions such as those mentioned above encourage a more responsible culture of self-detention, which creates a market with healthier fundamentals in the future.
The market is preparing for the halving in 2024
There are many reasons why the markets should be bullish in the future. One of these reasons is that the halving of the bitcoin mining reward is planned for 2024, which means that the reward per block will be halved.
The reduction in the block reward means that the potential selling pressure from miners has dropped sharply, which has historically pushed the price of bitcoin higher in the market.
Those who predict that history could repeat itself, as with previous divisions, are optimistic. They expect the price to rise during the Bitcoin halving. Everything else in the market is expected to experience the parabolic effects of Bitcoin's block reward halving.