MarketsWhat happened to 3ac?

What happened to 3ac?

So for those who don’t know 3ac is one of the largest crypto funds in the space it has billions of dollars under management the last public number is 10 billion dollars and it’s heavily invested in a number of crypto companies and projects. It’s also engaged in trading strategies both in the spot markets and in d5 so some of you may already be familiar with 3ac. Given that it had pretty large exposure to terror yep there’s terror again prior to its collapse last month.

3ac actually works with terra to help accumulate that bitcoin that was held by the luna foundation guard now it’s because of this exposure to the terror that 3ac took a massive hit in that collapse not many people know how large it is was but we can assume that it was pretty damn consequential.

3ac had also invested heavily into alternative layer ones like an avalanche which has also taken a beating as of late in the past few weeks as markets have continued to slide. It’s only reasonable to assume that 3ac’s capital position has deteriorated. It also had a great deal of st eth exposure and as this started to fall relative to eth. It only worsened 3ac’s position so rumors have been swirling over the past few days that 3ac could be facing margin calls and insolvency and early this morning one of the co-founders just tweeted this quote we are in the process of communicating with relevant parties and fully committed to working this out. 

Now that is fun to speak for we’re talking with our counterparties and hoping they will accept haircuts now the broader implications of this could be substantial that’s because 3ac has borrowed from nearly every crypto lender in the space on top of that its available collateral could have been severely impacted and it may not have enough to go around. 

Now, this is all broken down in this Twitter thread by d gen trading which I’ll link to below he makes the argument that this shortfall on the margin calls could have broader implications for those lenders who are likely to want to withdraw credit from the system which means there will be less money overall, in other words, a great deleveraging could be coming now. 

I’m hoping that it’s orderly but the gods of the market don’t always answer our prayers do they now in terms of other things to watch out for yes it really is hectic out there celsius appears to be in discussions with restructuring lawyers and according to the wall street journal it could be looking to raise additional funding. The hope here is that this could be used to provide liquidity for withdrawals in other celsius news all eyes appear to be on a maker dow vault that celsius controls which came close to liquidation a few days ago. If those liquidation levels were hit it would lead to market cells of the collateral thankfully though through numerous top-ups the liquidation level has been moved down to 14k.

So we do have some breathing space for now and as I mentioned in a tweet thread this morning something else yep something else that you should be on the lookout for is us double d d pegging us double d being Tron’s ecosystem stable coin. It’s algorithmic which means a similar dynamic to ust however the Tron dao does have more collateral relative to a market cap of us doubled and it is committed to defending the peg but one has to wonder what the implications could be if that collateral had to be sold and finally.

We have some big macro news to come today yep it’s rate hike time yay expectations have moved up aggressively to a 75 basis point rate hike and that is on the back of the shocking 8.6 inflation number we saw last week remember. 8.3 percent was expected and small numbers make a big difference, especially at times like this how the markets react will depend on what’s been priced the hope is that if it is 75 then at least expectations are met and there isn’t a mass sell-off however if jay Powell signals that many more large hikes are incoming the market could tank afresh. So the rates announcement is set for 2 pm eastern time which is 11 am pacific and 6 pm GMT so set your alarms or find a nice big rock to hide under until all this is over I won’t judge you either way now, whatever happens, it’s going to be a wild ride and at times like this it can feel as if this crypto roller coaster is coming off the tracks but it’s my belief that long term we will come out of this intact at least those of us who hold on.

11 years ago today Bitcoin was $0.01

 

RELATED ARTICLES

Most Popular

Latest Posts