Are there any bitcoin sellers left?
Over 1% of bitcoin supply has been sold in 2 months. The sell pressure may be losing steam.
If you give a hedge fund manager an unsecured line of credit, make sure they use some of the money for a down payment on a $50 million yacht. Wait, actually don’t do that.
This is the lesson learned by Genesis, Voyager, Celsius, and several other creditors who lent to the now defunct Three Arrows Capital (3AC).
Today’s post combs through the $5 billion+ sell pressure bitcoin has endured over the past couple months and asks, is bitcoin sell pressure losing steam?
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Institutional selling mania
Three Arrows Capital
A $50 million yacht to be delivered from Italy and two $28.5 million and $48.8 million bungalows in Singapore. These are the lavish items procured by Kyle Davies and Su Zhu of 3AC using borrowed funds.
This is not the only revelation from a recent affidavit issued by British Virgin Island liquidators, as we’ve also learned that 3AC may not have any meaningful position in bitcoin, although this comes with asterisk—GBTC—which we will discuss shortly. This is bullish, as that means that forced liquidations are likely in the rearview mirror. Nevertheless, 3AC’s lenders have a long road ahead.
3AC notably had $600 million worth of exposure to Luna—here’s a look at what happened to bitcoin during the Luna collapse week (BTC down 36%):
After Luna became virtually worthless and creditors came knocking, 3AC went running, literally. In a Madoff-style move, Kyle Davies and Su Zhu ghosted their creditors, leaving over $3.5 billion in unresolved claims according to an 1157-page leaked affidavit filed by the liquidating court in the British Virgin Islands. The pair were reportedly detained Dubai this week trying to board a private jet to Switzerland.
To this point, court-ordered liquidators have only managed to seize $40 million in assets, a meager sum compared to the reported $3.5 billion of creditor exposure. What remaining assets will be liquidated?
Despite some rumors on Twitter, Three Arrows Capital is reported to have sold none of their 38,888,888 shares of GBTC, worth about $600 million. The forced liquidation of these funds, which could conceivably come in the next few weeks, would further widen the stubborn discount to NAV, currently -29.6%. See the bottom panel for GBTC’s discount to NAV: