Three Arrows Capital has been shocked by the outbreak of a liquidity crisis since the 14th. This morning, the founder of Three Arrows Capital Su Zhu’s speech on social media seems to confirm the rumors about what happened to Three Arrows Capital? The following will summarize the recent rumors of Three Arrows Capital, organized by BlockBeats, the columnist of the dynamic zone. (Additional background:Three Arrows Capital exchanged 68 million magnesium stETH for ETH, and cashed out 20 million magnesium!)
In the round of bull-bear conversion, some well-known institutions, capital, and projects will leave the line of sight. When the market scale becomes larger and larger, the replacement will become more and more violent. We saw that the top five LUNA by market value went to zero overnight. Celsius, the largest lending platform in the United States, had to suspend withdrawals.
Since yesterday (14th), it is rumored that Three Arrows Capital, which is quite active in the primary and secondary markets, has also experienced a liquidity crisis. This morning, Su Zhu, founder of Three Arrows Capital, seems to confirm the rumors in his social media speech. Su Zhu said:
We are communicating with relevant parties and working to resolve the issue.
As for what happened to Sanjian Capital, we still have to wait for the official confirmation, but we can get a general outline of the situation of Sanjian through some KOL analysis and news. Based on the information of several KOLs below, this crisis is mainly divided into three parts: GBTC, stETH and Luna, in addition to the decline in assets caused by the collapse of various cottages and trading losses on some platforms.
According to public information, as of the end of 2020, Three Arrows Capital was the largest holder of Grayscale GBTC, holding 5.6168% of the GBTC share, with a market value of about $1.24 billion at that time.
As we all know, GBTC cannot be redeemed and can only be sold in the secondary market. If the three arrows want to make up the Margin call, GBTC can only be sold in the secondary market.
More serious than Bitcoin’s fall, Three Arrows appears to be using leverage to buy Bitcoin. According to crypto trader degentrading’s disclosure on his social networking site, Three Arrows Capital has lending positions with several mainstream lending platforms, such as BlockFi, Genesis, Nexo and Celsius. Therefore, if Three Arrows Capital is liquidated, the impact will be extremely extensive.
Further reading:Three Arrows Capital accused of “misappropriation of client assets”?One Capital: Take $1 million for no reason
The recent problems of stETH are mainly due to the lending platform encouraging revolving lending. Three Arrows Capital seems to be leveraging on revolving lending, and the market decline has forced Three Arrows to sell.
According to trader MoonOverload’s summary on social networking sites, people think Celsius is the biggest stETH dumper, but that’s not the case: the biggest sell-off is from Three Arrows Capital. The selling timing of the two institutions is different, most of Celsius’s sell-off was a week ago, and Sanjian was sold in the past two days. On-chain data shows that Three Arrows is dumping stETH through every account and seed investment address it owns.
MoonOverload believes that most of these sell-offs look like repayment of their debts and borrowings.
Further reading:How serious is the risk of stETH when institutions withdraw from Lido and sell off?
Many people believe that the collapse of LUNA is also an important reason for the problems encountered by Three Arrows. FatMan, a member of the Terra Research Forum, said that Three Arrows Capital once purchased 10.9 million LUNAs at a price of $559.6 million, and is now worth $670.45.
If you’re ever feeling down or angry at yourself about UST/LUNA, don’t beat yourself up too much over it. It was highly sophisticated deception. A lot of brilliant minds fell for it.
For example, Three Arrows Capital bought 10.9M locked LUNA for $559.6m – it’s now worth $670.45.
— FatMan (@FatManTerra) June 14, 2022
All of the above news seems to indicate that Three Arrows Capital is going through Margin Call, and it is using all the assets that can be used. According to crypto trader degentrading on his social networking site, Three Arrows Capital is pledging the equity shares it has previously acquired in the primary market in exchange for more liquidity.
Further reading:The Luna group destroys the major whales” South Korea’s Hashed loses 3.6 billion magnesium! Galaxy Three Arrows Pentera DeFinance Jump… suffers billions of losses
Further reading:Leave BTC alone!Three Arrows Capital founder Zhu Su deletes ETH, AVAX, SOL and other tokens from Twitter
Hope Three Arrows Capital can get through this difficult time.
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