Singapore-based hedge fund Three Arrows Capital is driving the crypto market deeper. Accordingly, the giant company faces the threat of liquidation. To avoid this, he has to pay off his debt. At this point, the hedge fund started liquidating its assets in this altcoin project to pay off debt.
Hedge fund liquidating these altcoin holdings
started with a wallet allegedly affiliated with Three Arrows Capital. The aforementioned wallet has liquidated more than 15,000 Ethereum (ETH) on Compound in just 1 hour. This sale resulted in a drop in the price of altcoin assets based on Three Arrows Capital. As prices fell, the hedge fund risked a massive liquidation. If this happens, the company may go bankrupt. Now the firm has started selling its other altcoins to ease the pressure to liquidate.
Three Arrows Capital faces crisis after Celsius
As we have reported as Cryptokoin.com, the cryptocurrency market has entered a bear cycle. entry. Therefore, extreme market conditions and high volatility are straining all DeFi projects. Leading DeFi lending protocol Celsius has been trying to resolve a major liquidation risk recently. Analysts expect a massive collapse in cryptocurrency prices if the Celsius liquidation occurs. Now the same thing has happened to hedge fund Three Arrows Capital. The giant firm is now struggling with the risk of liquidation and even bankruptcy.
Data provider PeckShieldAlert published a series of posts on Twitter today. The shares revealed that Three Arrows Capital released 15 thousand ETH in just 1 hour. Million-dollar sales were made with 5 transactions. Accordingly, a wallet removed its ETH position with a health factor of 1.04. Then, it sold close to $35 million worth of altcoins on Compound. Address used stablecoins such as USDC and USDT to pay off its debt and withdraw its ETH. Next, Three Arrows Capital will convert ETH to USDT or USDC on Uniswap V3. Thus, he will repay the debt through Compound.
Major liquidation may occur for this altcoin in the Giant Hedge fund
In addition, Three Arrows Capital wants to prevent the liquidation of 223 thousand ETH worth approximately $264 million. That’s why he’s paying off his debt in AAVE V2. If ETH price drops to $1016, altcoin ETH holdings in the wallet will risk liquidation. This will increase liquidation risks. Also, as seen in the last few hours, it will cause massive sell-off on Ethereum basis.
Additionally, Three Arrows Capital is liquidating its stETH holdings to ETH due to liquidation risks. Top firms have already liquidated their positions in Three Arrows Capital. Meanwhile, several crypto firms are currently revealing their research to Three Arrows Capital.
Three Arrows Capital lost its shine in ETH collapse
Three Arrows Capital is also said to be facing bankruptcy as it faces liquidation risks. Meanwhile, the firm’s co-founder, Zhu Su, explained that they are working on the situation while communicating with interested parties. However, Ethereum (ETH) price is likely to see below $1,000 after today’s Fed meeting. As it is known, the Fed will probably raise interest rates due to inflation and stagflation.
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