A tremendous bearish pull has hit the cryptocurrency market. The recent disaster began on Sunday, when Celsius, one of the largest crypto lending platforms, halted all withdrawals, swaps, and account transfers. According to reports, the corporation has recruited restructuring attorneys to assist with available solutions to its increasing financial woes.
Conversely, suspicions circulated about possible tension at Three Arrows Capital. This was due to a confusing tweet late Tuesday from its founder Zhu Su. Zhu Su’s Tweet said that they are in the process of connecting with related personnel and are dedicated to sorting this out.
According to a report by The Block, the Three Arrows is finding answers on how they can repay lenders and other creditors. All this is rolling out because the firm went into bankruptcy after there was a liquidation by top-ranked financial institutions.
Three Arrows, a key participant and one of the most prominent hedge funds in the market, was expected to manage approximately $10 billion in assets in March. As per a regulatory filing, the business also controlled over 6% of the Grayscale Bitcoin Trust GBTC, the world’s largest bitcoin fund, as of December 2020.
The uneasiness has taken a heavy toll on Bitcoin, trading over 70% down from its all-time high in November. However, the currency has a tiny comeback after the Fed announced the highest rate rise since 1994.
At the time of publication, Bitcoin is trading at $21,835 with a surge of 2.58% over the last 24hrs.
Other Lending Platforms On The Radar
Investors are also tracking the positions of Celsius’s competitors, such as BlockFi and Nexo. These sites allow users to invest their cryptos and receive extraordinarily high rewards. For example, on Celsius, buyers may earn up to 18.6% APR, per its website.
Following Celsius’s account suspension announcement on Sunday, Zac Prince, CEO of competitor crypto lender BlockFi, tweeted to reassure consumers that “all products and services @BlockFi continue to operate regularly.”
However, BlockFi said on Monday that it would lay off around 20% of its personnel as the rapidly changing macroeconomic situation impacts the company’s growth pace.
Nexo, another cryptocurrency lender, tweeted yesterday that it “had no connection to Three Arrows Capital.”
Institutional Interests To Weaken?
As per Wave Financial’s Siemer, Terra’s demise and recent concerns surrounding Celsius and Three Arrows might weaken institutional investors’ trust in the crypto market.
ProChain Capital’s president and co-founder, David D. Tawil, believes otherwise. According to him, the cryptocurrency crisis may frustrate investors from the traditional banking business.
So, what’s your opinion? How will the Celsius and Three Arrows impact the crypto market? Lets us know