BlockFi now rejects GBTC as collateral

BlockFi has unwound its positions in Grayscale’s Bitcoin Trust.

The lending platform made headlines earlier this month for its injection of capital from crypto exchange FTX.

BlockFi has managed to navigate the aftermath of Three Arrows Capital’s meltdown without having to pause withdrawals while industry rivals continue to grapple with serious financial headwinds.

While BlockFi claims its exposure to Three Arrows was limited, it was a heavily exposed to the Grayscale Bitcoin Investment Trust (GBTC), an investment product which saw its discount to NAV drop precipitously to more than -34% amid the fallout of the beleaguered hedge fund.

BlockFi has now unwound its positions in GBTC. Moving forward, it will not accept the product as collaterally. The firm plans to announce this move later this week.

GBTC enables traders to gain exposure to bitcoin without directly buying and holding the crypto themselves.

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