The future of the reputable crypto hedge fund hangs in the balance due to liquidations from its lenders, The Block reported.
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- Three Arrows Capital could face insolvency after USD $400 million liquidations.
- The co-founder addressed the issue in a vague tweet.
- The firm has been selling its positions in various cryptocurrencies.
The hedge fund focused on cryptocurrencies,Three Arrows Capital capital is most commonly defined as the large sum of money you would use to invest. could be at risk of collapse due to unexpected liquidations in the midst of the steep bear someone who believes that prices in a given market will decline over an extended period. Such a person might be referred to as “bearish.” market.
As reported byThe Block a file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain.The Singapore-based firm could face insolvency after incurring liquidations of at least USD $400 million. According to the news agency, which spoke to people familiar, the company was liquidated by crypto lending firms and is currently working to repay lenders and other counterparties.
A bum tweet of the co-founder ofThree Arrows, Su Zhu, seemed to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. these rumors. “ We are in the process of communicating with the relevant parties and fully committed to resolving this. “ he said, without providing details.
We are in the process of communicating with relevant parties and fully committed to working this out
– Zhu Su ???? (@zhusu) June 15, 2022
Neither of the firm’s co-founders, Zhu and Kyle Davies, have responded to media requests to address the matter.
El futuro de Three Arrows hangs by a thread
News of a possible insolvency by one of the crypto industry’s most prominent funds is sparking new fears in an already shaken sector.
However, liquidations don’t seem to be the only difficulty a measure of how hard it is to validate a new block on a blockchain. the company is going through, which has seen several of the projects it backs go down amid the widespread collapse of the cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. market.Three Arrows suffered significant losses last month during the plunge in the value of the Earth . According to the report, the fund had invested heavily in LUNA, the token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. native of Earth .
The firm has also backed projects such as Avalanche, Solana, Polkadot y Ethereum whose token native have declined 89% 88%, 86% and 77% from their historical price highs, respectively, according to data from CoinMarketCap .
On the other hand, other reports point to the company selling its positions in several of its existing digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currencies to reduce collateral collateral is any asset that a lender accepts as a form of security to ensure that the borrower repays a loan. requirements for certain positions. According toThe Defiantwhich cited chain data,Three Arrows Capital sold at least USD $40 million in Ether the form of payment used in the operation of the distribution application platform, Ethereum. apostado (staked) de Lido first thing Tuesday morning.
Journalist Colin Wu also reported in a tweet that the fund has a guaranteed position ofEther wrapped (WETH), worth USD $235 million in the DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. protocol. Aave as well as debt totaling USD$183 million in USDC and USDT. If the price of ETH falls close refers to the closing price; similar to the same term used in stock trading. to USD $1,014, the collateral position will face liquidation, Wu warned.
Celsius, liquidations and insolvency risks
The problems of Three Arrows come amid reports claiming that the crypto lender Celsius could face insolvency . The company, as an overview CoinDesk The company has managed billions of dollars in user funds and may not have enough capital to pay investors.
One of these strategies he used Celsius involved the use of staked Ether (stETH), which is expected to be negotiated at the same time as the Ethereum a decentralized open-source blockchain with smart contracts functionality. (ETH). Sin embargo, hace unas semanas, el token began to experience a dramatic disengagement that could be related to sales by Three Arrows, according to a report by The Defiant.
According to the media, which quoted DeFi analyst, DeFiyst the stETH settlement ofThree Arrows started in May, right after the collapse of the stable UST currency currency is a medium of exchange that defines value. of Earth . At the time, the move seemed to coincide with the disassociation of stETH. The observers noted that the fund has been depositing and withdrawing the token en las plataformas Curve y Aave and began selling this week.
Popularly known as 3AC, the firm is one of the largest cryptocurrency funds in the industry, and while it does not disclose the assets it manages, these are believed to be worth billions of dollars, as it notesThe Defiant. En marzo se estimó que Three Arrows managed about USD $10 billion in assets according to data from Nansen quoted by Bloomberg .
According to the news portal, it is estimated that Zhu, who is a former operator for Credit Suisse Group AG is one of the largest cryptocurrency holders in the world. It has also been a vocal “ toro ” de criptomonedas, como lo califica The Blockwho in the past has shared projections of a bullish ‘supercycle’; although he has now admitted that he was wrong about his prediction.
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Article by Hannah Estefania Perez / DiarioBitcoin
Image from Unsplash edited in Canva
