After Terra and Celsius, Crypto Market Now Might Be Hit With | METAVERSE & NFT | NEWS 🌌
After Terra and Celsius, Crypto Market Now Might Be Hit With Three Arrows
The major crypto hedge fund Three Arrows Capital (3AC) is rumored to be insolvent, with reports suggesting the firm has already faced massive liquidations and on-chain data indicating large sales of ethereum (ETH) staked on staking provider Lido in the past week.
3AC is one of the largest hedge funds in the crypto industry, and a crash, it is widely believed, would have large and widespread consequences, as the industry was hit by the Terra crash in May, and a major crypto lender, Celsius, got into troubles this week.
The rumors that have circulated about 3AC are largely based on on-chain data from the Ethereum network. The Block reported that the fund has already faced liquidations of several hundred million US dollars.
Per data from blockchain forensics company PeckShield, ETH 15,743 (USD 16m) "supposedly related to 3AC" have been liquidated today.
At the time of writing (09:20 UTC), ETH traded at USD 1,026, down nearly 16% in a day and 44% in a week.
Meanwhile, reports also indicate that the firm has apparently sold large amounts of staked ETH on Lido, represented by stETH tokens, which have come under pressure in the market. At the time of writing, stETH traded at USD 972 (down 16% in a day and 46% in a week) versus USD 1,026 for ETH.
Although each stETH is backed by 1 ETH staked on Ethereum’s Beacon chain (Ethereum 2.0), the actual ETH tokens that are staked remain locked and inaccessible for now.
Earlier on Wednesday, the rumors were for the first time addressed by Zhu Su, the company’s co-founder and CEO:
“We are in the process of communicating with relevant parties and fully committed to working this out,” Zhu wrote in a brief update on Twitter at around 1 AM UTC.
He did not provide any further details.
The statement was met with confusion and more questions by members of the crypto community.
