The 60% plunge in Voyager Digital’s share price since it disclosed its exposure to Three Arrows Capital (3AC) has been accompanied by a further decline in cryptocurrency industry stocks.
According to TradingView, Voyager Digital plunged 60% during normal trading hours on Wednesday before closing at $ 0.5998, marking a 50.84% drop on the day.
The sharp decline followed Voyager Digital’s disclosure that the potentially insolvent company Three Arrows Capital (3AC) le debba 15.250 Bitcoin (BTC) is 350 million USD Coin (USDC), for a total value of approximately 660 million dollars.
Voyager has given 3AC until June 24 to repay $ 25 million and until June 27 to pay off the full amount before the loan is deemed to be in default. The firm also said it is working with lawyers on how to take legal action against 3AC, in the event that the alleged venture fund is unable to repay its debt.
Alameda Research has extended a renewable loan 200 million USDC and 15,000 BTC to remedy Voyager’s current liquidity problems. This week the company also has reduced daily withdrawal limit and $ 25,000 to $ 10,000.
“Better $ 10,000 than $ 0 with Celsius”ha commented in response the Redditor AdLongjumping5010 in the sub-Reddit r / CelciusNetwork.
Other cryptocurrency-related stocks continued to suffer. Shares of Coinbase fell 9.71% to $ 51.91, while MicroStrategy, heavily exposed to BTC and led by Michael Saylor, saw its shares drop 4.50% to $ 170.91.
Coinbase at $ 14 billion is one of the dumbest things I’ve ever seen in public markets.
Rivaled perhaps only by Apple, which at the end of 2008 traded 50% more of its cash balance.
I can’t believe boomer mispricing pushes me to move money into the Stonk account.
Coinbase at $14 billion is one of the dumbest things I’ve ever seen in the public markets.
Rivaled maybe only by Apple trading at 50% above its cash balance in late 2008.
I can’t believe boomer mispricing is going to cause me to move money into stonk account.
– Ryan Selkis (@twobitidiot) June 22, 2022
Also titles related to cryptocurrency mining have experienced notable slumps, with Riot Blockchain losing 9.63%, while Bitfarms, Hut 8, Marathon Digital Holdings, and Core Scientific all fell by around 5-7%.
The collapse in cryptocurrency prices represents only a portion of a broader downward trend in equity and crypto markets in 2022, with the benchmark S&P 500 in bear market territory and down 21.6% year to date . According to Bloombergis the first time this has happened since 1970.
Related: Binance US Makes BTC Trading Free, While Opponents Warn the Competition
In general, investors are frightened by the U.S. Federal Reserve’s monetary policy and this year’s attempts to curb inflation, which have ushered in a series of interest rate increases.
Fed chairman Jerome Powell discussed how the government will manage to contain inflation, but suggested that by continuing to drive up funding costs, the Fed could prepare for a recession.
During his testimony to the Senate Banking Commission on Wednesday, Powell said: “It is certainly a possibility”, in response to a question from Senator John Tester, adding that “it is not the result we intend to obtain, but it is certainly a possibility”.
Risk Disclosure: The articles and articles on Arover.net do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies.
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