Just as the crypto market was recovering from the aftermath of the Terra ecosystem collapse and the Celsius debacle, another sour conjecture with respect to the potential ruination of a prominent crypto hedge fund manager was brought to light during the late hours of Tuesday.
Zhu Su and Kyle Davies’ 3 Arrows Capital has speculatively been hard hit by the state of the crypto market and is on the verge of succumbing to insolvency.
The firm’s co-founder Su, however, took Twitter to clear the air and address the rumors associated with the state of the firm and its operations. A few hours back he tweeted that they were “fully committed” to working things out and were in the process of communicating with ad rem parties.
The Great Crypto Crisis of 2022?
The fund, as such, faced notable losses last month at the time of the Terra ecosystem collapse, for it was invested in LUNA. In fact, the recent Celsius episode also managed to expose its fund to more downside volatility.
Even though Su’s tweet managed to instill slight optimism, it couldn’t completely veil the nasty situation in which 3 Arrows Capital is. They’ve allegedly started withdrawing customers’ funds to bail themselves out. 8BlocksCapital’s Head of Trading brought to light that the fund had withdrawn about $1 million from its accounts this morning.
The crypto market is already in a fix and people from the space, at this stage, have started drawing parallels to 2008’s global financial crisis. Alongside, question marks with respect to the sustainability of the industry and systemic punctures are being raised.
Ex Messari research analyst and Pangea Management Fund’s Ryan Watkins went on to exclaim that the “great crypto financial crisis” may be well underway and quote tweeted a thread explaining why the 3AC going under is actually worrisome.