February 4, 2023

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Enorm Crypto-Hedgefonds op Randje van Failliet – Wat Nu?

A Huge Crypto Hedge Fund on the Brink of Bankruptcy – What Now? » Crypto Insiders

Earlier this week We wrote it Tether denied That the USDT was standing on its own two feet due to the lack of good collateral and that Celsius Bank was in danger of bankruptcy due to investments that had depreciated so much. Currently turns up Crypto Hedge Fund Three equity shares also approx busty.

An $18 billion crypto fund went bankrupt?

to write The Wall Street Journal Based on what co-founders Kyle Davis and Cho Soo said last Friday. They are also considering a bailout in addition to selling their assets. The fund purchased 200 million LUNA tokens in February, according to Davis.

Write on Twitter DeFi Edge Why hI think Three Arrows Capital is on the verge of bankruptcy. This is a hedge fund targeting Cryptocurrency It will have approximately $18 billion under management. Major investments include AVAX, NEAR, Axie Infinity (AXS), So is Terra (LUNA). According to Twitterer, the amount will be 559.6 million US dollars, although there is no confirmation of this. There will be rumors that Terra’s collapse has caused the fund to use more debt to make up for its loss.

Thus, Three Arrows Capital, also known as 3AC, uses leverage. So it must have enough liquidity to weather the storm. Since he invested in tokens that are supposed to have a lock-in period, some investments cannot simply be sold for cash. This means that tokens that can be sold must also be sold.

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massive chain reaction

The fund will also raise approximately $264 million Ether (ETH) You have Aave as collateral on the DeFi platform. If the price of ether drops strongly enough, this should also be liquidated. The price level for the margin call will be $1,042 although there is no confirmation of that either. The price of Ether has also fallen from this point this morning.

But it doesn’t stop there. 3AC also provides “Treasury Management”. Companies with a lot of cash on their balance sheet can give that to an investment fund, so they are almost guaranteed to get a good return. But that business model stops working once the fund goes bankrupt. All these companies, which often seem to already exist in the crypto world, incur a lot of losses if 3AC goes bankrupt. This means that these companies also tend to sell other cryptocurrencies in order to maintain their stability. So a chain reaction.

DeFi Edge says it has been in contact with a company He gave his money to 3AC. 3AC was once seen as safe and reliable, but the company is now ignored by the fund. These companies have no idea if the fund is now able to access their money.

So it remains to be seen if these companies will ever see their money and what the impact will be on the market. It is also unclear how many companies would be part of such a chain reaction.