In the wake of Coinbase's announcement that the bulk of the funds generated from the GBTC sell-off would stay within the cryptocurrency realm, Genesis, a now-defunct crypto lending entity facing insolvency, has purportedly shed approximately 36 million shares of Grayscale Bitcoin Trust (GBTC) to bolster its Bitcoin holdings. This move is part of its strategy to settle outstanding debts owed to creditors.

According to a recent report by Bloomberg, Genesis executed the liquidation of around 36 million GBTC shares on April 2, fetching roughly $58.50 per share at that juncture. Notably, the share price surged by approximately 50% from the time Genesis initially sought authorization from the U.S. bankruptcy court on February 2 to vend the aforementioned GBTC shares when they were priced at $38.50.

The proceeds from the sale amounted to a staggering $2.1 billion, enabling Genesis to acquire 32,041 Bitcoin on April 2, priced at $65,685 per unit. These newly acquired Bitcoins will be channeled towards Genesis' ongoing endeavors to settle its obligations to creditors.

As of the latest reckoning, the value of the 32,041 Bitcoin stands at $2.18 billion. Meanwhile, cryptocurrency exchange Coinbase has reassured stakeholders that the GBTC sell-off is unlikely to exert widespread repercussions on the crypto market.

Coinbase articulated that, in accordance with the bankruptcy plan, Genesis had the option to either convert GBTC shares into the underlying Bitcoin asset on behalf of creditors or sell the shares outright and disburse the proceeds. This development follows Digital Currency Group's contention that Genesis's proposed repayment plan exceeds the creditors' entitlements.

In a report on February 6, Digital Currency Group alleged that Genesis's proposed plan would result in lenders receiving "hundreds of millions of dollars more than the full amount of their petition date claims."

The saga began in January 2023 when Genesis filed for Chapter 11 bankruptcy in the Southern District of New York, marking a turning point in its financial trajectory.