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The sudden decline of FTX has created a devastating effect on the entire Bitcoin and crypto market. The digital asset panic is the order of the day, with Solana taking a huge hit as many investors tossed the coin.

FTT, the native crypto asset of FTX, has lost almost all of its investor value. Most investors had withdrawn their tokens in large quantities until the exchange halted withdrawals and filed for bankruptcy.

Bitcoin, like most altcoins, still felt the effects of this sudden market sentiment. Most centralized exchanges saw unprecedented withdrawals, with investors withdrawing their assets into personal wallets.

Crypto exchanges like Binance have gone the extra mile to reassure users of their strength; and a transparent financial status. However, the upheaval shows no signs of abating, with crypto brokerage Genesis trading under financial pressure.

Genesis will be looking to enlighten the public with a call at 8 a.m. EST tomorrow. This call will reveal the current situation of Genesis and its relationship with Alameda Research. On November 11, FTX Group and Alameda filed for bankruptcy under the voluntary Chapter 11 bankruptcy code – in the United States.

FTX exchange CEO Sam Bankman-Fried has resigned and transferred to John J. Ray III. Back-to-back revelations of large-scale financial misappropriation have led investors to scrutinize most centralized exchanges.

Grayscale’s Bitcoin Trust and ETHE under fire?

Grayscale’s value asset – GBTC was on a 41% discount due to the collapse of FTX. Data from Coinglass pegs total GBTC holdings at 633.64 BTC; these holdings; worth over $10 billion.

FTX contagion is spreading, will ETHE and Grayscale Bitcoin Trust share the same fate as FTT?
Grayscale Bitcoin Trust

Ark Invest had recently acquired the shares of Grayscale Bitcoin Trust for a total value of 2.8 million. The GBTC premium is now at -37.08%, with ETHE at an all-time high of -34.47% following the FTX crisis. The effect of this crash has created doubts about the sustainability of cryptocurrencies.

Grayscale to crack then?

The devastating collapse of FTX alongside Alameda Research has created a domino effect across multiple crypto exchanges. As a result, some businesses are unwinding their plans to file for bankruptcy protection.

According to rumors in the crypto space, Genesis is also struggling with financial issues. According Autism Capital, the implication is the likely dissolution of ETHE and GBTC to repay the lenders. Genesis Interim CEO Derar will welcome calls from clients tomorrow to clarify the direction of the crypto markets and their ready status.

Autism Capital earlier tweeted that Grayscale held power over the GBTC and ETHE trusts, not Genesis. Despite the support of Digital Currency Group: Genesis and the parent company of Grayscale, the situation could remain bad. Digital Currency Group may ultimately dissolve GBTC and ETHE to balance their financial books.

FTX contagion is spreading, will ETHE and Grayscale Bitcoin Trust share the same fate as FTT?
Bitcoin price fails to break through $17,000 limit BTCUSDT on Tradingview.com

To create transparency, Genesis trading declared $175 million of its funds locked in an FTX trading account. However, they insist that they are not exposed to FTX. DCG, in response, provided Genesis with $140 million in capital injection. It is not yet certain; how the relationship between FTX and Genesis will ultimately come into play in the proceedings.

Featured image from Pixabay, chart from TradingView.com





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