Bitcoin Dips Below $19,000 After 3AC Clearance

Bitcoin slipped briefly below $19,000 Thursday, as losses for cryptocurrencies deepened after the liquidation of troubled hedge fund Three Arrows Capital sparked fresh worries about the stability of the digital-asset sector.

The leading cryptocurrency by market value dropped to $18,914, according to CoinDesk data, before recovering somewhat to regain $19,000 again. It was last trading 5% lower on the day at around $19,041, down about 60% year-to-date.

Elsewhere in the market, ethereum dropped 9.4% to $1,018.93, and is now down more than 70% year-to-date. Major altcoins cardano, solanaand XRP fell 6.5%, 9.9% and 6.1% respectively. Tea

Cryptocurrencies have suffered a steep sell-off this year alongside assets like growth stocks as investors turned to less risky investments in the face of rising inflation and a potential



At the same time, high-profile financial troubles and bailouts in the crypto ecosystem have cast doubt on the stability of the sector. That has put pressure on crypto prices including bitcoin, and analysts said the liquidation of Three Arrows Capital, also known as 3AC, on Wednesday could continue to push prices down.

“Concerns are growing that the collapse of Three Arrows Capital could trigger further market contagion,” Oanda analyst Edward Moya said in a note.

A British Virgin Islands court ordered the liquidation of 3AC after it defaulted on repaying a $670 million loan to the lending firm Voyager Digital. The hedge fund, co-founded by Su Zhu and Kyle Davies in 2012, is estimated to have lost $400 million in the crypto market crash, The Block reported.

It isn’t the first high-profile crypto company to suffer thanks to the

bear market

. Major lender Celsius froze all withdrawals after suffering


issues earlier this month, while the stablecoin issuer Terra saw its tokens USDT and luna both collapse in May.

Meanwhile, FTX CEO Sam Bankman-Fried said there are some crypto exchanges that are already secretly insolventaccording to Forbes.

There’s also been renewed scrutiny of companies that have taken out bitcoin-backed loans. Longtime bull Michael Saylor’s MicroStrategy is reportedly facing a margin call after bitcoin fell below $21,000, though the company bought more bitcoin worth about $10 million this week.

Some analysts see $20,000 as a key psychological level for bitcoin, and said its drop below that could mean a further drop ahead. Crypto hedge fund boss Dan Morehead of Pantera Capital said there are “major meltdowns” to come, Bloomberg reported.

“It’s getting very nervous in the crypto space and another significant break below here could bring fresh anxiety and more pain,” Oanda’s Craig Erlam said in a note about the $20,000 level.

Erlam added that it’s hard to create much of a bullish case for bitcoin beyond its admirable resilience and wondered how long the enthusiasm of its backers can sustain its price.

Read more: $290 billion in market value has been shed in a widespread crypto selloff this past week. These 3 investment strategies will help your portfolio amid the industry’s ‘bloodbath’, according to Fundstrat.

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