Crypto market update: 3AC possible insolvency shocks investors
The crypto fund with $10bn in assets under management could risk insolvency
The crypto market reacted somewhat timidly to the Federal Reserve decision to raise its benchmark rate on Thursday 16 June 2022. However, sales were starting to hit lead cryptos again after midday as another drama began to unveil in the Web3.0 space.
The US Fed raised the benchmark rate by 0.75 percentage points to a range between 1.5% and 1.75%. Fed chair, Jerome Powell, hinted at a similar sharp rate rise at the next Federal Open Market Committee (FOMC) meeting in July unless inflation softens.
“Bitcoin was unable to muster up a rally despite a broad rally on Wall Street following the FOMC decision,” said Ed Moya, Senior Market Analyst at Oanda. “The Fed relieved some concerns that they will take rates aggressively higher and that was good news for almost all risky assets.”
The initial timid but positive reaction of the market faded after midday as traders were shocked by rumours of possible insolvency by the crypto hedge fund Three Arrows Capital (3AC), thought to have $10bn in assets under management.
BTC retracing, again
According to Currency.com, bitcoin (BTC), the largest cryptocurrency by market capitalisation, ended yesterday at $22,561.65 up by 2.07%. It is currently trading at $21,205.
Over the past 24 hours, BTC is trading 0.9% lower, and 29.7% lower over the past seven days, according to CoinMarketCap. Bitcoin’s market cap was $404.1bn, representing around 44.5% of the crypto market capitalisation, while the lead crypto’s trading volume was around 7.6% lower, at $44.6bn, in the past 24 hours.
The digital oil, Ether (ETH), according to Currency.com, ended yesterday at $1,236, up by 2.43%. ETH is currently trading at $1,115.
The total crypto market capitalisation, which dropped below the $1trn level over the past seven days, was almost stable at around $906bn in the past 24 hours.
Top gainers and losers
According to CoinMarketCap, of the top 100 coins and tokens, Elrond (EGLD), the Elrond blockchain native token, witnessed a 15.8% increase over the past 24 hours and is changing hands at $51.82.
On the flip side, Bitcoin Cash (BCH), the altcoin supporting BCH peer-to-peer electronic cash system, recorded more than a 6.9% decrease over the past 24 hours and is trading at $111.12.
Among the crypto coins and tokens with more than a $50,000 24h-volume that have gained or lost the most in the past 24 hours, ELEF WORLD (ELEF) witnessed a 1,650% increase to $0.00003298, while LUNA DOGE TOKEN, (LDT), was down 72% at $0.000004185.
All cryptocurrency prices are correct as of 14:30 BST (UTC +1).