The bitcoin market has had a massive bearish pull. Celsius, one of the major crypto lending sites, froze all withdrawals, swaps, and account transfers on Sunday, kicking off the recent calamity. According to rumors, the company has hired restructuring lawyers to help with possible solutions to its mounting financial problems.
On the other hand, rumors of stress at Three Arrows Capital surfaced. This was in response to its founder Zhu Su’s perplexing post from late Tuesday. According to Zhu Su’s tweet, they are in the process of connecting with relevant employees and are committed to resolving the situation.
According to The Block, the Three Arrows are working on a plan to repay their lenders and other creditors. All of this is happening because the company filed for bankruptcy after being liquidated by top-tier financial institutions.
In March, Three Arrows, a significant player and one of the most well-known hedge funds in the market, was expected to handle about $10 billion in assets. According to a regulatory filing, as of December 2020, the company owned over 6% of the Grayscale Bitcoin Trust GBTC, the world’s largest bitcoin fund.
The unease has taken a toll on Bitcoin, which is now down more than 70% from its all-time high in November. The currency has slightly recovered since the Fed announced the most significant rate hike since 1994.
Bitcoin is trading at $21,835 at the time of publication, up 2.58 percent in the last 24 hours.
Other Lending Platforms To Keep An Eye On
Celsius’s competitors, such as BlockFi and Nexo, are also being watched by investors. Users can invest their cryptos on these sites and obtain huge returns. According to Celsius’s website, consumers can earn up to 18.6 percent APR.
Following the revelation of Celsius’s account suspension on Sunday, Zac Prince, CEO of rival crypto lender BlockFi, tweeted to reassure customers that “all products and services @BlockFi continue to operate routinely.”
BlockFi, on the other hand, said on Monday that it would lay off about 20% of its workforce since the fast-changing macroeconomic scenario impacts the company’s growth rate.
Nexo, another cryptocurrency lender, tweeted yesterday that it “had no connection to Three Arrows Capital.”
Is It Time For Institutional Interests To Weaken?
Terra’s demise and recent concerns about Celsius and Three Arrows, according to Wave Financial’s Siemer, may erode institutional investors’ trust in the crypto industry.
David D. Tawil, president and co-founder of ProChain Capital disagrees. According to him, the bitcoin issue will likely irritate traditional banking investors.
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