Cryptos rebound; Bitcoin hovers around $21,000 after Genesis bankruptcy

"Bitcoin is finding support ahead of the $20,000 level," Edward Moya, senior market analyst for foreign exchange market maker Oanda, wrote in an email. "The crypto space is getting cleaned up and as long as we don’t see a major reputable exchange go under, traders may mostly shrug off news of the demise of smaller crypto companies."

One such company could be crypto-lender Genesis, a subsidiary of conglomerate Digital Currency Group (DCG), which has filed for bankruptcy in recent hours after several months under pressure from liquidity problems that began with the bankruptcy of Three Arrows Capital and have become more pronounced following the collapse of FTX. According to the company, the number of creditors totals more than 100,000, while aggregate liabilities range from $1.2 billion to $11 billion.

In its statement, Genesis commented it expects the restructuring process to leave money to pay unsecured creditors, a group that can be wiped out in the event of bankruptcy if the situation is extremely dire.

The potential bankruptcy of the crypto-lender, whose most important open front is the dispute with Gemini following the Gemini Earn program, was one of the three main dangers that cryptocurrency expert Teeka Tiwari observed in the cryptocurrency market. According to this analyst, if Digital Currency Group is forced to pay all Genesis creditors, "it may have to liquidate the entire GBTC trust to unlock the value of its stake and pay off its creditors. If this scenario happens, it will unleash as many as 643,572 Bitcoins onto the market. That’s $13.7 billion in BTC. That would be too big of a supply shock for the market to absorb cleanly."

Binance and its reliance on Tether has also been put under the spotlight by Tiwari, who also pointed to a focus of concern in the ongoing U.S. investigation into possible money laundering on the world's largest cryptocurrency exchange. On Thursday, the U.S. Treasury noted that Binance was the main recipient of Bitcoins from the cybercrime network led by the Hong Kong exchange Bitzlato and the Russian darknet marketplace Hydra.

On the other hand, the current CEO of FTX and the person in charge of liquidating the exchange founded by Sam Bankman-Fried, John J. Ray III, indicated in an interview granted to 'The Wall Street Journal' that reviving the bankrupt exchange is a possibility. Despite the allegations against Bankman-Fried and other top officials, Ray praised FTX's technology and commented that, "if there is a path forward on that, then we will not only explore that, we’ll do it.” Recently, FTX's liquidators recovered more than $5 billion of FTX's assets in order to satisfy its debt to creditors.

In other market news, Ripple (XRP) and Cardano (ADA) have risen 1.2%, while Binance coin (BNB) has dropped nearly 1%, with Solana (SOL) losing about 1% to $21. Polkadot (DOT) has soared 1% and Shiba Inu (SHIB) has risen 2%.