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Crypto lenders out there have been severely struggling to deal with liquidity challenges. On Tuesday, July 12, crypto lender BlockFi introduced that it’ll not be accepting Grayscale’s GBTC shares as collateral.

Following the information, the GBTC inventory (OTCMKTS: GBTC) collapsed 5% on Tuesday ending at $12.21. Amid the Bitcoin value correction, the GBTC inventory has been on a freefall this yr. The share value of Grayscale Bitcoin Trust (GBTC) has corrected by almost 65% year-to-date.

The current choice from BlockFi highlights the fragility of the crypto lending business and its publicity to bancrupt firms. Grayscale had publicity to Three Arrows Capital, which was holding greater than 5% of GBTC inventory at one cut-off date.

Due to its dangerous debt with Three Arrows, BlockFi is already struggling losses to the tune of $80 million. BlockFi CEO Zac Prince spoke about their publicity in 3AC and added that they are going to be a part of the embattled hedge fund’s ongoing chapter case.

BlockFi Unwound Its GBTC Position

As per the newest data, BlockFi has already unwound all its GBTC place. On Tuesday, July 12, Zac Price replied to Meltem Demirors relating to the identical. Prince tweeted:

Hey Meltem 🙂 Just fyi – BlockFi straight holds zero GBTC. The Bloomberg information on that is outdated. We have a pair small loans (like sub $10M) w/ GBTC as collateral which are within the means of winding down.

Last month, BlockFi entered an settlement with FTX US to return out of its liquidity woes. As per the agreement, FTX US would lengthen a $400 million revolving credit score facility together with the choice for the alternate to accumulate BlockFi for an quantity of $240 million.

In comparability to different crypto lenders like Celsius Networks and Voyager Digital, BlockFi has been doing comparatively nicely. Even in these distressed markets, BlockFi hasn’t stopped buyer withdrawals, in contrast to its different friends.

Bhushan is a FinTech fanatic and holds a superb aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in the direction of the brand new rising Blockchain Technology and Cryptocurrency markets. He is repeatedly in a studying course of and retains himself motivated by sharing his acquired information. In free time he reads thriller fictions novels and typically discover his culinary abilities.

The offered content material might embrace the private opinion of the writer and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The writer or the publication doesn’t maintain any accountability on your private monetary loss.