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Cryptic tweet sparks fears for Three Arrows Capital crypto fund

Speculation over the future of major cryptocurrency hedge fund Three Arrows Capital is swirling after a cryptic tweet from the fund’s co-founder.

Speculation over the future of major cryptocurrency hedge fund Three Arrows Capital is swirling after a cryptic tweet from the fund’s co-founder Zhu Su.

The popular trader gave a wave update on Wednesday, hinting that Three Arrows Capital was looking for a solution to an issue it was facing.

“We are in the process of communicating with relevant parties and fully committed to working this out,” Zhu, a former Credit Suisse Group AG trader, wrote to Twitter.

Unconfirmed reports from crypto traders claim the firm may have missed a margin call is now in dire straits due to the recent meltdown in the crypto market.

Launching in 2012, Three Arrows Capital has enjoyed success in the cryptocurrency trading market, growing into a multi-billion dollar establishment with Zhu and his longtime partner Kyle Davies gaining fame online.

Three Arrows Capital, which is estimated to manage over $10 billion in assets, has not yet published an official statement in response to the rumours.

In the last 24 hours, bitcoin hit a low of US$20,834, sparking a frenzy among the community with opinions divided over what the future will bring for the relatively new asset.

On Friday, data found the USA’s inflation rate had reached a new high — rising to 8.6 per cent in May, the worst its been since 1981. The news cascaded through the cryptosphere with investors forced to either dip out entirely or wait out the storm.

Cryptocurrency is closely aligned with the traditional stock market and over the last few days, markets like Dow Jones have tanked and entered a bear run.

Analysts warned that if BTC dips below the all-important $20,000 mark, it could spell disaster for the blockchain.

In the same way, the future of the world’s second largest cryptocurrency, ethereum is also in doubt.

It was trading at $1,075.28 during its lowest point in the last day.

An expert has warned that if bitcoin slips below $20,000 and ethereum below $1000, then “massive sell pressure” will ensue which will further drive down prices.

Arthur Hayes, former BitMEX chief, took to Twitter to voice his concerns.

He continued in his Twitter thread: “As far as the charts go, you better get out your Lord Satoshi prayer book, and hope the lord shows kindness on the soul of the crypto markets.

“Bc [because] if these levels break, you might as well shut down your computer bc [because] your charts will be useless for a while.”

The bitcoin and ether token have been suffering, as have the rest of the world’s cryptocurrency in the wake of economic turmoil and major crypto exchanges pausing transactions.

Around midday on Monday, UK-based Celsius pays interest on cryptocurrency deposits, loans them out and also sells its own token, CEL, but it ceased all activities around midday on Tuesday.

In a blogpost the company warned it was “pausing” all withdrawals and transfers between accounts, adding: “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts.

“We are taking this action today to put Celsius in a better position to honour, over time, its withdrawal obligations.”

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