Changpeng Zhao has highlighted how Genesis’s collapse would impact the crypto market. The Binance head said on Bloomberg TV that the crypto landscape would still stand strong even if Genesis collapsed.
Genesis could cause crypto’s demise
Following the demise of a deal with Binance, Genesis mentioned that they could run bankrupt if they don’t get a $1 billion loan. The startup has connections to many other networks in the crypto landscape.
Genesis is a network operating under the Digital Currency Group (DCG) umbrella, which includes other projects like Grayscale, Coindesk, Foundry, and Luno. The DCG umbrella has connections to hundreds of projects in the crypto landscape. As such, there have been vast rumors in the crypto community that if Genesis dies, it may take DCG and Grayscale down with them.
According to reports, there are several massive projects with exposure to Genesis, including Circle, Luno, Gemini, and possibly Coinbase. Owing to these connections, there have been rumors that the death of Genesis will spark the end of most crypto networks and the general crypto ecosystem.
Crypto will survive Genesis’ demise
Binance CEO Changpeng Zhao, while speaking in an interview, said that the crypto market would survive even following Genesis’ demise. The CEO’s words come just a few days after Binance rejected plans to rescue the troubled lender Genesis.
In the Bloomberg interview, CZ was asked, “Can the industry survive if Genesis were to go bust?” CZ responded with seemingly no doubt,
“The industry will survive… it will have no issues. Although, there will be pain.”
CZ mentioned that Genesis has a miniature impact on the markets, controlling only a couple of billions. Moreover, he highlighted that the lender mostly focuses on institutional investors. He said that while the crypto market will lose, it will surely survive.
The Binance CEO also mentioned that the decentralized markets offer opportunities for other players to join markets when some are extinct or even learn from the mistakes committed by their predecessors. Therefore, many more investors would learn from Genesis’ mistakes.
Aside from CZ, other industry leaders have also chimed in on the impact of Genesis’s demise on crypto. For instance, Anastasia Kor, the CMO of Choise.com, said;
“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.”
Crypto has survived worse
Crypto has proven resilient over the years through the toughest times. This year alone, the crypto market has survived the death of top networks. Anastasia continued to mention;
“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.”