Assets on the Digital Currency Group portfolio have taken a hit over the last 24 hours, triggering market speculation.
It has been a month since troubled crypto lender Genesis Global Capital, daughter company of DCG, suspended redemptions.
“DCG and Genesis have highly competent teams. In normal circumstances neither would pay 15%-30% of slippage to rapidly exit long-held positions over the weekend, so observers are naturally speculating this was a forced event of some kind,” Rich Rosenblum, president of trading firm GSR, told The Block on Saturday.
Filecoin in particular has seen a significant decline.
"It’s by far the most traded of the portfolio in the last 24 hours," Rosenblum said. "It could be due to there being a highly developed borrowing market for FIL, which resulted in more selling once a -15% intraday threshold was breached. You need to stake FIL to mine it. Miners often borrow FIL by leveraging their other holdings."
Ran Neuner, CEO of Onchain Capital, speculated in a tweet that DCG may be dumping as it tries to repay a $1.5 billion loan to Genesis, or it could be heading toward bankruptcy as it exhausts its liquid assets.
Bitvavo crypto exchange wrote in a company blog on Friday that DCG is “experiencing liquidity problems” and has “suspended repayments.”
Updates with corrected name of Digital Currency Group. Previous post said Digital Coin Group.
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