Bitcoin Dips Below $63K as Genesis Distributes Assets Following Bankruptcy

Bitcoin has dropped below $63,000, falling as much as 3.5% to $62,411 amid market risk aversion and news that Genesis has begun distributing digital assets to creditors following its bankruptcy restructuring, according to Bloomberg. Major tokens like ether (ETH), Solana (SOL), Uniswap (UNI), and Chainlink (LINK) saw declines of 4% to 5%.

The cryptocurrency's decline comes as the July U.S. employment report heightened recession fears, impacting financial markets. Although a weak jobs report typically leads to lower bond yields and a weaker dollar—which often boosts risk assets like stocks and Bitcoin—the opposite occurred yesterday. The Nasdaq is down 3.1%, and the S&P 500 has fallen 2.7%, driven by an 11% drop in Amazon and a 5% decline in Nvidia. The Volatility Index (VIX) surged by 54%, according to Coindesk.

Further pressuring the market, Genesis Trading has transferred 16,600 Bitcoin (about $1.1 billion) and 166,300 ether (around $521 million) from its wallets. Genesis, which filed for bankruptcy in early 2023, has now completed its restructuring and started distributing roughly $4 billion in digital assets and cash to creditors. Bitcoin creditors will receive 51.28% recovery, ether creditors 65.87%, and Solana creditors 29.58%.

Genesis's bankruptcy, one of several crypto lender failures during the last bear market, also involved legal disputes and accusations against its parent company, Digital Currency Group, and Gemini, which had a lending program with Genesis. Earlier this year, Genesis settled with the SEC for $21 million over unregistered securities sales. This distribution follows Mt. Gox’s recent repayment of its first tranche of billions to creditors.