Bernstein: Grayscale Bitcoin Trust Is Protected From Fallout at Sibling Company Genesis Global

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.BernsteinBuzz says if GenesisTrading has to file for bankruptcy, creditors have no claim on the assets of Grayscale's GBTC as it is ring-fenced from failures within parent company DCGco or DCG group entities. BernsteinGautam By willcanny99

The Grayscale Bitcoin Trust is drawing market attention after sister company Genesis Global Capital said its lending unit would halt customer withdrawals as a result of fallout from theThe situation at Genesis, however, does not directly affect GBTC, the report said. Even if Genesis is unable to raise liquidity for its lending book and files for bankruptcy, creditors would have no claim on GBTC assets.

Grayscale Investments, which manages GBTC, and Genesis are both owned by Digital Currency Group , as is CoinDesk. “GBTC’s trust structure protects its holders and remains ring-fenced from failures within DCG or DCG group entities,” analysts Gautam Chhugani and Manas Agrawal wrote. The market is concerned that Grayscale could be “considered for strategic options in case of catastrophe,” the note said. But DCG, even in the most adverse scenario, would prefer to hold onto Grayscale over Genesis, it said. Greyscale is DCG’s “flagship business and its cash-cow,” generating around $300 million a year in fees, according to Bernstein.

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BernsteinBuzz GenesisTrading Grayscale DCGco BernsteinGautam willcanny99 Hate to say it but GBTC is probably the biggest scam of all time. Apparently holders of the share can’t redeem it for BTC. Good luck selling at a discount.

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