© Reuters
Investing.com– The and the cryptocurrency market in general came under renewed selling pressure on Tuesday after cryptocurrency-focused investment bank Genesis reported a potential risk of bankruptcy due to its exposure to the recently insolvent FTX exchange.
The largest cryptocurrency by capitalization fell 3% to $15,787.4 as of 6:47 p.m. ET (2347 GMT), after falling as low as $15,504, its lowest level in two years, earlier in the day. The world’s No. 2 crypto, , fell 3% to $1,108.81, bringing its total losses this month to almost 30%.
After FTX, towards a Genesis bankruptcy?
The latest victim of this year’s cryptocurrency crash, Genesis Global Trading, one of the largest institutional lenders in the space, has warned that it could face potential bankruptcy if it is not in able to raise new funds. The bank is said to be looking for new funds to the tune of a billion dollars, but has not yet found a source.
However, the company said it did not intend to file for bankruptcy “imminent”. She reportedly approached major stock exchange Binance and private equity firm Apollo Global Management (NYSE:) for funds.
The report comes a week after Genesis’ lending arm suspended withdrawals as concerns over its exposure to FTX sparked a run on banks.
Reports released earlier this year showed that Genesis had several outstanding loans to Alameda Research – the cryptocurrency trading desk that was closely linked to the FTX bankruptcy. She also reportedly lost funds due to her exposure to hedge fund Three Arrows Capital, which went bankrupt earlier this year.
Another crypto lender, BlockFi, filed for bankruptcy earlier this month, while several other smaller players suspended withdrawals or halted some lending and staking services as the contagion from FTX’s bankruptcy continued to spread.
The capitalization of cryptocurrencies below $800 million
Amid severe bitterness towards the space, the total capitalization of cryptocurrencies fell below the $800 billion mark, and several altcoins posted prolonged losses. fell 3.4%, while memecoin lost 2.1%.
Recent data has shown that institutional investors are investing heavily in crypto short selling products in anticipation of further losses. The full impact of FTX’s bankruptcy has yet to be felt, given that the exchange was at one point the second largest broker in the crypto industry.
By Ambar Warrick