Co-founder of the Singapore-based cryptocurrency hedge fund company, Three Arrows Capital, Su Zhu, said that FTX’s implosion and other noteworthy crypto predicaments had reversed the crypto industry’s growth by almost ten years. The statement was made on Tuesday, 22nd November, in an in-person interview in Abu Dhabi. Su Zhu was connecting the deteriorated industry growth with the recent collapse of FTX.
Industry sees slower growth if FTX issues are unresolved
Su Zhu said that major players in the crypto industry have asserted that the FTX implosion will lead to the industry’s slow growth and advancement by five to eight years. The slowdown may lead to even ten years or more if FTX cannot resolve its issue quickly enough.
The crypto industry and market had already taken several hits and were healing before the FTX catastrophe threw another lethal blow.
Since attaining major highs in November 2022, numerous cryptocurrencies have experienced a significant decline, with Bitcoin, the largest cryptocurrency globally, dropping from its $69,000 mark to less than $20,000.
The FTX implosion has only served to fuel the market’s volatility. The collapse has also raised traders’ anxieties, as they have confirmed that despite FTX being the second largest crypto exchange company globally, it is still very vulnerable to declines and implosion.
The implosion has raised expectations of even tighter regulations and policies on digital assets trading and services, as well as the crypto industry as a whole.
3AC’s June implosion contributes to industry’s setback
In an industry notorious for severities, Zhu and his Kyle Davies were two of the loudest bulls. The two co-founders planned deals with leveraged boosts, which put 3AC at the epicenter of a string of explosions that have shaken the cryptocurrency industry this year. The collapse of the exchange FTX last month caused the problem to worsen.
The Three Arrows Capital (3AC) sustained severe losses as a result of the demise of LUNA and Terra, losing $560 million at its height due to its considerable investment in the two digital assets.
At the time, 3AC owed more than $3 billion and still loaned over $2 billion from Genesis, its biggest creditor. Celsius Network and Voyager Digital both became bankrupt as a result of 3AC’s debt default.
It was in June that creditors realized 3AC was insolvent when it marketed investors on a new chance to save the company. In an effort to salvage the situation, Davies attempted to negotiate a new loan from Genesis to pay the margin call. It was not until mid-June that 3AC insolvency was announced. Currently, 3AC’s June implosion is one of the industry’s most tremendous hedge fund trading crashes.
Ifeanyi Egede
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