CRYPTO COLLAPSE: MAJOR DEFAULT ??
Lets get to some news here, because we are open in the stock market. Now you would think okay were talking about crypto, so who cares? Actually, we do care because theres been a correlation between stock market trading and stock market performance and crypto trading and crypto performance, so wed like to track those together. We like to look at when those markets open and determine uh the correlation right there. As you can see right here down about one percent over the global market cap, this is still keeping us above 21 000 at bitcoin, which is always a good thing and ethereum over 1200, which is always a good thing as well. So we can see right here. Um some of our favorite coins not doing too bad uh ever since this weekend. I think if the stock market performance is going to be doing well today, then we will probably see a better week than we did last week, but you never know hopefully uh theres. No any big massive global news and everything just kind of stays the same. If it does, i think that this will be a probably pretty good week for everything. So crypto hedge fund, at the center of crisis, faces risk of default as deadline to repay 670 million years now were covering this because it is really a tricky kind of story because the three arrows capital – and we can go right here and look at more information About them, but three arrows capital has such a web of investments to other companies that, with this potential huge default, it can really be a domino effect to the broader crypto currency markets.
Now, what theyre talking about right now is voyager digital, so they owe 670 million to voyager dilla, digital and several others in wednesday. That is actually coming due for them to have to pay it. Okay, you can see that theyve actually been served papers, so three arrows capital, the crypto hedge fund, at the center of an ongoing credit liquidity crisis, has been served. A notice of default for failing to repay the 670 million dollar loan from voyager, diligent digital, easy. For me to say so you can go right here and look at the three arrows capital website. It is very, very sparse. You have to enter accept and then you can see right here. It basically says its the hedge fund established in 2012, and focus on providing superior risk adjustment returns, which is clearly hilarious because they did not do any kind of risk hedging. Instead, they put lots of equity on their balance sheet from these partners. So you can see right here that a default from three hours capital can have some major major major domino effects. We can see right here, equity in block phi uh, fire blocks, tps capital, and then you have to you have to think okay, where, where did these go right like where? Where does the domino for these go? You can see the funds that they have co invested with the gaming nfts that they have on their balance sheet as well, ax infinity being the main one that we want to look at now.
Axe infinity had a news story just recently talking about the lack of revenue that they have been making recently, so they their revenue has fallen severely, which means the the player in the games have not been able to acquire as much money or get as much return Playing the game which leads to users falling off so thats another trickle down effect and thats, just one of many that youre going to be able to see here. So you can see right here that this is um a huge huge huge deal for this capitol call. Basically, what its called to be raised, so the voyager said, is intends to pursue recovery from three arrows capital and its talking to its advisors regarding legal remedies available through arrows capitals facing liquidity crisis after the collapse of tara, usd and luna margin calls on its loans And a massive slump in the crypto market, so the margin cause all the loans is whats going to be able to get a lot of people, because if you go to something like a celsius, let me show you right here: you can see that they are really Really, drawing back in their openness and willing to chat about this, they had an ama and the company navigates very difficult challenges, so they cancel their ama and we actually have some um interesting news about celsius that ill get into in a different video later today. But for right now um this is also facing a liquidity crisis, and so what happens is basically you go on to celsius or any kind of lending platform, and even like three arrows capital has done this, and big and big massive institutions have done this.
So what happens is they go and they borrow things on margin, so how margin calls work? Are this, so a margin calls a demand from your brokerage firm to increase the amount of equity in your account. You can do this by depositing cash or marginal securities into your account or by liquidating existing positions to generate cash now thats the problem with this, because three arrows capital has several loans and several things that they have bought on margin and now that the currency or The market has crashed, they need to come up with either selling the asset to generate cash or they need to provide more cash by putting it into their loans or making their payments, and so far they have not been able to do that. Theyve actually been defaulting on their payments, and it has been something that they are now people facing legal action for them, but with billions of dollars being wiped off the digital corn coin market, the hedge fund is facing a potential liquidity and solvency issue. Voyager digital is a asset. Brokerage said that at last lent three arrows capital, 15, 250 bitcoins and 350 million of the stable usdc, so thats a ton of money, at least to me at mondays prices. The total loan equates to more than 675 million. He gave three arrows capital until june 24th to repay 25 million of that and the entire outstanding loan by june 27th, but it looks like theres really no way that this is going to be able to get done now, theres a couple ways that people do it: They can raise additional money and i guarantee you theyre, probably in a mad dash to raise additional money right now, um, but for right now they are not making it and theyre defaulting on their payments, which is really a problem.
It says it tends to pursue recovery from three arrows capital and is taking advisors to legal actions. So we can see right here that this is just a continuation of the story. It was established in 2012. We know that hes known from his credibly bullish view on bitcoin and put his money where his mouth is. The founder um could be worth 2.5 million per bitcoin. He said, but may this year, um it began to melt down in the super cycle. Price thesis was regrettably wrong and we got into a crypto winner were in the process of communicating with relevant parties and fully committed to working this out as the ceo thats. What he said right here, theres no follow up about what they were specifically talking about um, but obviously this came at the same time. That celsius was having a issue with their liquidity as well, and once again, i believe that this is something that celsius will potentially pull out of the bag. Actually they might they might they might. They might come out victorious in this one um, but they said after that tweet the us based crypto lenders, blockfi and genesis liquidated some of three arrows capitals positions so theyve already after that tweet they already did the meltdown and um people were not having it. They wanted it off with these as soon as possible. The margin call is a situation which an investor has to commit more funds to avoid losses on a trade made with borrow cash, and the biggest thing, obviously, is the contagion risk.