Last Updated on November 25, 2022 by Bitfinsider
Changpeng Zhao has emphasized how the collapse of Genesis might affect the cryptocurrency market. The CEO of Binance asserted that even if Genesis failed, the cryptocurrency market will continue to be robust.
Genesis earlier stated that if they don’t obtain a $1 billion loan, they risk going bankrupt after a deal with Binance fell through. The startup is connected to a wide variety of other cryptographic networks.
Genesis is a network that is part of the Digital Currency Group (DCG), a group that also oversees the Grayscale, Coindesk, Foundry, and Luno projects. There are linkages between the DCG umbrella and thousands of cryptographic projects. As a result, there have been many rumors in the crypto world that DCG and Grayscale may also perish along with Genesis if it dies.
According to rumors, a number of significant projects, including Circle, Luno, Gemini, and perhaps Coinbase, have exposure to Genesis. Due to these relationships, there have been concerns that the demise of Genesis will lead to the demise of the majority of crypto networks as well as the whole crypto ecosystem.
Crypto will endure even if Genesis fall
In an interview, Binance CEO Changpeng Zhao asserted that even after Genesis’ collapse, the cryptocurrency market would endure. Just a few days before, Binance had rejected proposals to save the insolvent lender Genesis. Now the CEO has spoken.
“Can the industry survive if Genesis were to go bust?” was a question that CZ was asked during the interview. CZ replied with what appeared to be certainty that “The industry will survive… it will have no issues. Although, there will be pain.”
Genesis has a negligible impact on the markets, CZ noted, controlling only a few billions. Additionally, he emphasized that the lender primarily targets institutional investors. While the cryptocurrency market may lose, he claimed, it will undoubtedly survive.
The CEO of Binance also noted that decentralized marketplaces provide other participants a chance to enter markets when some become extinct or even learn from the errors made by their forebears. Thus, a lot more investors would pick up on Genesis’ errors.
Other industry titans have added their perspectives on how Genesis’ bankruptcy may affect cryptocurrencies in addition to CZ. For instance, Anastasia Kor, the CMO of Choise.com, stated that: “The outlook of Genesis Global Digital as a distressed crypto company is very bad. But if it collapsed like other top players in the industry, the combined contagion would further drag the digital currency down. The question of whether a likely Genesis fall will stir a comprehensive crash in the industry is at best subjective. The companies, platforms, and investors exposed to the firm may feel the brunt but overall, the industry may survive the crash.”
Through the worst periods, cryptocurrency has shown to be robust throughout time. The death of leading networks has not affected the cryptocurrency industry before this year. Anastasia went on to say: “This resilience can be predicted as the industry is still standing despite the collapse of Terra Luna, Three Arrows Capital, Voyager Digital, and FTX. A Genesis collapse will make no difference. A major reason why the impact of a likely Genesis crash will not be felt is that many market stakeholders have now been exercising enhanced risk management strategies, a move that will generally help minimize the impact of any possible exposure to the Digital Currency Group (DCG) owned firms.”
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