Title: Crypto Hedge Fund’s Tweet Fuels Speculation Over Losses

Jun 15, 2022 03:00AM ET

By: AnalysisWatch

A vague tweet from the founder of influential hedge fund Three Arrows Capital, which has liquidated crypto holdings as prices collapsed, is raising new fears in an already shaken industry.

While details of the fund's size and trading strategies are scarce, blockchain analytics firm Nansen estimated in early March that Three Arrows had around $10 billion under management.

According to the latest available regulatory data, it owned more than 5% of the Grayscale Bitcoin Trust as of December 2020, although it is unclear whether Three Arrows has retained this position.

The trust has a market capitalization of around $10 billion.

Recent attention on Three Arrows has focused on its exposure to a cryptocurrency called Staked Ether, or stETH.

According to Nansen, last month the trust began withdrawing ETH from decentralised platforms.

As recently as Tuesday morning, it raised more than 80,000 stETH in four transactions from the decentralised Aave lending platform and then exchanged 38,900 stETH for 36,700 Ether.

According to CoinGecko, the price of stETH has plummeted 41% over the past seven days to $1055.14, while Ether has fallen 39% to $1116.17.

Three Arrows was one of the investors in the $1 billion sale of the Luna cryptocurrency in February. Luna, the sister currency to the TerraUSD stablecoin, lost almost all of its value in May when TerraUSD's dollar peg was broken.

Data from CoinGecko shows that the coin, which was distributed to Luna holders to compensate them for their losses, has plummeted 87% from its May 28 high.

The total market value of cryptocurrencies tracked by CoinGecko has plummeted to $944 billion, down from $3 trillion in November.