Three Arrows Capital, a Prominent Crypto Hedge Fund, Defaults on a $670 Million Loan (cnbc.com) 45
Prominent crypto hedge fund Three Arrows Capital has defaulted on a loan worth more than $670 million. Digital asset brokerage Voyager Digital issued a notice on Monday morning, stating that the fund failed to repay a loan of $350 million in the U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin, worth about $323 million at today's prices. From a report: 3AC's solvency crunch comes after weeks of turmoil in the crypto market, which has erased hundreds of billions of dollars in value. Bitcoin and ether are both trading slightly lower in the last 24 hours, though well off their all-time highs. Meanwhile, the overall crypto market cap sits at about $950 billion, down from around $3 trillion at its peak in Nov. 2021. Voyager said it intends to pursue recovery from 3AC (Three Arrows Capital). In the interim, the broker emphasized that the platform continues to operate and fulfill customer orders and withdrawals. That assurance is likely an attempt to contain fear of contagion through the wider crypto ecosystem. "We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands," said Voyager CEO Stephen Ehrlich.
Ha ha ha! =))) (Score:5, Funny)
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That's what happens when greed takes over. Thinking everything will all go up to the moon but eventually reality will check in.
The real fallout will be how many people will list their time at 3 Arrow on their linkedin profile...
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Except the actual value of crypto when you remove speculation is $0, where stocks are backed by the actual plant, property, equipment, cash on hand, and revenues of the company that issued the stock certificates...
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The stock market has been pumped up to about a thousand times its value by derivatives and the fed's QE, plus interest and fees, buybacks, mergers, acquisitions. It is a true ant mill [youtu.be]
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What demographic you think is also in favor of stricter stock and market regulations, those who are critical of crypto or those who boost it?
We can be critical of both, they are not exclusive.
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This is also what happens when you stupidly lever up with loans and then put that money into highly speculative "investments" (read: bets) on "assets" backed by nothing but computers turning electricity into heat at varying efficiency levels.
Some gamblers use cash advances against credit cards and end up bankrupt that way. These guys took a slightly different road to the same destination.
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Not really, this loan was in real cash. Basically this is part of the ongoing market crash. Venture capital projects of all sorts are going under right now, not just crypto. People don't want to or can't currently invest, the government has pumped too much cash in the economy and the risks banks took on people spending that cash didn't realize, the bubble has burst, we are heading for rapid inflation, devaluation and economic disaster.
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Inflation is just there (Score:2)
When the last bubble burst, we had a similar level of consumer debt and housing prices were about as high, yet we saw (momentary) deflation.
When the last bubble burst we had vastly less government debt than today.
When the various bubbles pop, it will cause deflation yes - but at the same time inflation will continue increasing in other areas, so many things will get more expensive even wholesome things are crashing.
Welcome to Stagflation. We've got probably a good 5-10 years of it to look forward to. Hop
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It isnt causing inflation (although not 100% sure we are seeing a 'burst' rather than a correction either). However equity markets have depreciated quite a lot more then dollar depreciation(inflation) would account for based on producer price index growth and wage growth.
What is kinda new (and really only kind but we just tend to forget about it when we look back) is different parts of the market are not trending together. That has a lot to do I think with the various forms of interventionism and changing v
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CLARIFICATION - I expect the inflationary trend in durables to reverse shortly - I don't expect it change for food, energy, or labor.
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...the bubble has burst, we are heading for rapid inflation...
When the last bubble burst, we had a similar level of consumer debt and housing prices were about as high, yet we saw (momentary) deflation. Why would this bubble bursting cause inflation?
Because no costs are otherwise coming down, and the joke of a response towards the "Putin" gas hike, will continue to be a joke. At everyone's expense other than the elites causing it.
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No, nothing to do with that, everything to do with the US Federal Reserve printing presses go brrr.
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Re: Ha ha ha! =))) (Score:2)
That's not nice. Good people were fooled (Score:3)
A lot of perfectly nice people were fooled by this crypto crud. I feel sorry for them. You could say they were foolish, but then we've all done something foolish before.
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Perfectly sane people thought they are investors when they were really speculators and that was because the promotors and some media painted all these unregulated instruments as 'investments' when they were not. That was the big lie in cryptos.
The worst part was there is no consequences. The crypto bros are not going to pay those people back.
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PT Barnum had some thoughts on fools and their money. He was a very wise con artist.
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The three main driving emotions of humans are greed, fear and greed.
Not giving in to them is the first step to enlightenment. And also to having money.
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Down ~2/3rds+ in less than a year so far... (Score:2)
3 Trillion down to under 1 as of two weeks ago .. [ksl.com]
The overall crypto market, which was worth nearly $3 trillion last November, has now seen almost $2 trillion in losses as the total market cap dipped briefly below $1 trillion Monday.
According to coindesk, it's also not back at where it was pre-pandemic yet either.
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So they forgot to hedge ? (Score:1)
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By being bad at it, of course.
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1. they took on leverage in order to buy.
2. that leverage looked like a good play when crypto was on the rise.
3. crypto hasn't been on the rise for 6+ months now
4. the payment on that loan is due, the lender doesn't give a fuck and wants their payment, and the borrower is still out of position because they didn't hedge sufficiently against the value of crypto being 1/3 or less than what it was when they bought into the position.
Don't buy on margin if you can't get out of the position in time for the margin
Take a loan, they said. (Score:2)
Buy crypto, they said.
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Well, of course! I wanted out and needed a patsy.
That's kind of it for crypto (Score:2)
Such a surprise... (Score:3)
Colour me shocked it did not happen earlier.
a$$hats and someone elses money... (Score:2)
Here's one of his brilliant quotes from last year "“Bitcoin’s down 30% off the highs, it’s really not down very much,” the 34-year-old said in an interview from Singapore. “I don’t see anyone really being tha
Who is still claiming crypto anything is legitimat (Score:1)
Anyone who is still claiming anything relating to or having the involvement of crypto is legitimate, is nothing more than a con artist looking to recruit the next greater fool⦠prove me wrong! Come on, lets hear from you crypto experts!
Re: Who is still claiming crypto anything is legit (Score:1)
You wrote: "Bet you won't repost this!"
Of course I will⦠and I donâ(TM)t need nor am I looking for the karma⦠but by the tone of your message, it sounds like it may have found you⦠Donâ(TM)t be disappointed if you see no one is sorry for your loss! Were you looking to off load your scam to the next greater fools and were not successful?⦠Good! Con artists deserve to lose it all!
Canary in the crypto mine (Score:2)
Anyone who is still claiming anything relating to or having the involvement of crypto is legitimate, is nothing more than a con artist looking to recruit the next greater fool⦠prove me wrong! Come on, lets hear from you crypto experts!
Be careful about gloating too much over the collapse of the crypto market. The fact that it's sucked so much real world assets means that its collapse would have far ranging effects beyond the crypto brotherhood. Or maybe it's the economic canary we should be looking out for. Being more volatile than the rest of the economy, it may simply be reacting to real world events much faster.
Re: Canary in the crypto mine (Score:1)
You Wrote: âoe The fact that it's sucked so much real world assets means that its collapse would have far ranging effects beyond the crypto brotherhood.â
The real world assets that were lost, were all lost by the next greater fool; not by anyone who was born with common sense. Just maybe the ending of this long running scam will wipe a large portion of the greater fool population off the map and there will be less of them to feed the next scam. That would include the financial networks and their ta
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Hopefully... (Score:2)
Hopefully in a few years we can all look back at this crypto fad and laugh (uncomfortably).
An old saying goes . . . (Score:2)
If you owe $6.7 million dollars, the banker has you by the throat.
If you owe $670 million dollars, you have the banker by the throat.
I do not predict this ending well for Voyager Digital.