As the crypto market grapples with bearish threats and Celsius Network halts withdrawals, Three Arrows Capital CEO Zhu Su has broken his silence on his company’s rumored liquidity crisis.
A month after de-pegging TeraUSD and days after crypto lender Celsius suspended withdrawals, the co-founder and CEO of hedge fund Three Arrows Capital broke silence on the massive liquidations celebrated by market pundits.
A Twitter user who goes by the pseudonym “MoonOverlord” sparked possible bankruptcy rumors noteworthy After Zhu and Three Arrows co-founder Kyle Davis hadn’t tweeted for days, Zhu deleted his Instagram account and removed ETH, AVAX, LUNA, SOL, NEAR, MINA and NFT from his Twitter bio, only BTC left.
Speculation on the activities of Three Arrows and its founders intensified when the company withdrew 80,000 stake ETH from DeFi platform AAVE and swapped 38,900 worth of STTH for 36,700 ETH. Assuming that the ratio of ETH to stETH is less than 1:1 and will become 1:1 only after the Ethereum upgrade, some market pundits say that this could clearly indicate a lack of liquidity. The anticipated upgrade to the Ethereum network’s proof-of-stake will allow a 1:1 ratio between ETH and staked ETH.
Zhu debunks rumors of liquidity problems through a spy Tweet Published on 14 June 2022.
“We are in the process of communicating with relevant parties and are fully committed to working on this,” he tweeted. Zhu previously criticized Ethereum on Twitter, saying he would “give up” the world’s second-largest cryptocurrency by market cap.
Three Arrows Puts Bitcoin Through Grayscale
Recent data from Nansen shows that Three Arrows Capital manages approximately $10 billion, which includes more than 5% of the Grayscale Bitcoin Trust. The company does not directly own bitcoin, but delegates management of the major digital currency to Grayscale. This ownership model is in contrast to Microstrategy, the largest corporate holder of bitcoin, which holds assets directly on its balance sheet.
Company loss due to Luna crash
Last month, the hedge fund suffered a massive setback after it co-invested $1 billion with Jump Crypto in Luna, the sister coin of TerraUSD that helped raise its dollar peg. Luna fell to almost zero a month ago, sending shockwaves through the broader crypto market and triggering a market sell-off that caused the prices of bitcoin, ether and other smaller cryptocurrencies to plummet. Three Arrows’ investment contributed to the Luna Foundation Guard, a reserve created to help maintain UST’s peg in case Luna fails. The reserves were ultimately unable to support stablecoin recovery.
Woo Blockchain informed of Three Arrows lost $31 million in trading on Bitfinex last month. The crypto hedge fund moved its headquarters to Dubai in late April.
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