The cryptocurrency industry was on edge on Monday morning as investors feared contagion from problems at major crypto players could unleash a major shakeout if not contained.
Crypto hedge fund Three Arrows Capital is exploring its options, including the sale of assets and a bailout by another firm, its founders told the Wall Street Journal in a story published Friday, the same day Asia-focussed crypto lender Babel Finance said it would suspend withdrawals. “If the market goes higher, everyone breathes a sigh of relief, things will get refinanced, people will raise equity, and all of the risk will dissipate. But if we move much lower from here, I think it could be a total shitstorm,” said Adam Farthing, chief risk office for Japan at crypto liquidity provider B2C2.
To be sure, the developments in crypto have coincided with an equities slide, as U.S. stocks suffered their biggest weekly percentage decline in two years on fears of rising interest rates and the growing likelihood of recession. The overall crypto market capitalization is roughly $870 billion, according to price site Coinmarketcap, down from a peak of $2.9 trillion in November 2021.
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