Three Arrows Capital Is Now Pushing Crypto Market Down as It Loses Millions of Users’ Funds

ETH

One of biggest funds in crypto is rapidly losing ground under its feet

One of the largest funds in the cryptocurrency industry is now facing massive pressure as it is forced to fund its huge collateral. Unfortunately for them, even the slightest downward volatility on Ethereum will put the company’s position in a huge liquidation.

As the Bitfinex leaderboard suggests, 3AC has lost more than $30 million on Bitfinex trading in May only, losing first place on the platform. During the year, the fund lost almost $40 million.

In addition to large losses on derivatives trading, which could still be part of its hedging strategy, its capital-backed NFT funds moved the entire collection to the SuperRare market, with no disclosure of its intentions. .

The funds own various pieces from unique collections and are able to sell them to cover a portion of their debts. Unfortunately, because of the low demand on the NFT market and Ethereum’s devaluation, it will not make any difference for the funds.

3AC’s known collateral positions are 212,000 WETH worth approximately $235 million on Aave V2 and a total debt of $183 million in stablecoins. If Ethereum dips to $1,014, the collateral will face liquidation, creating an irrevocable loss.

Despite the panic of investors, the fund’s manager Zhu Su stated that they are working with the relevant parties and are fully committed to fixing the situation. The co-founder of 3AC is most likely trying to attract more funds from potential investors to partly cover the debt and push the liquidation price lower if the market faces selling pressure once again.

At press time, Ethereum is changing hands at $1,092 and showing no signs of recovery.

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