Three Arrows Capital Liquidates 15,000 ETH To Avoid LiquidationJune 15, 2022
According to a report, the hedge fund company, Three Arrows Capital is currently liquidating its portfolio to pay its debts. This activity is reportedly worsening the bearish condition of the crypto market.
In the report, a wallet address said to be owned by the hedge fund company has recently liquidated about 15,000 ETH in 60mins. Furthermore, the firm had been reportedly withdrawing funds from various wallets it owed to avoid liquidation.
The firm is under the pressure of liquidation as the price of ETH continues to decline. And as such, the value of its Ethereum holding is declining rapidly.
Three Arrows Capital Faces Liquidation Threat
Days ago, Celsius was reported to be facing a financial crisis likened to that of Terra. However, Three Arrows Capital is said to be on the same radar of financial crisis as Terra and Celsius. Its predicament is getting worse as the crypto market condition continues to deteriorate.
Furthermore, a prominent crypto analyst on Twitter, PeckShieldAlert, tweeted that Three Arrows Capital has withdrawn 15,000 ETH in 60 mins. Furthermore, it took the firm 5 transactions to completely liquidate $35 million in ETH earlier today.
In addition, the hedge fund firm has been reportedly using the withdrawn funds to settle its debts on the AAVE 2nd platform. It did this to secure its 223k ETH that Worth’s about $264M from liquidation.
The firm’s holdings stand the risk of liquidation if the price of ETH falls below $1016. If this happens, there would be a massive ripple effect as many investors would sell off their ETH holdings.
Additionally, Three Arrows Capital is said to be swapping all its staked Ethereum stETH to Ethereum ETH to mitigate liquidation risk. Meanwhile, many top firms in partnership with Three Arrows Capital had already withdrawn their funds.
Furthermore, many crypto companies are exposing their involvement with the hedge fund firm.
Three Arrows Capital Suffers From Insolvency
It was rumored that the Three Arrows Capital is experiencing strong insolvency as it faces the threat of liquidation. Zhu Su, co-owner of the company, shared that all hands are on deck to resolve the issue as soon as possible.
He furthered that they are currently in talks with many associates in search for a suitable solution. Nonetheless, it is seemingly that the price of ETH might hit the $1000 price lows very soon.
However, the Federal Reserve officials are constantly striving to tame the raging beast of inflation. They are set to increase the rate of interests to this effect.