The collapse of crypto hedge fund Three Arrows Capital (3AC) indicates that the ramifications of this year's cryptocurrency market slump continue to reverberate, JPMorgan (JPM) said in a report Wednesday.
While it is hard to assess how much more deleveraging still needs to happen, the bank said, its indicators suggest the process is already well advanced.
Multiple failures among companies in the industry should not surprise given the backdrop of deleveraging and the 70% drop in digital asset market capitalization since November, the report says.
The entities that employed higher leverage in the past are now the most vulnerable, the bank said. “Whether it is miners having borrowed to expand operations using their bitcoin as collateral, or corporates such as MicroStrategy (MSTR) having borrowed in the past to invest even more heavily into bitcoin, or hedge funds using futures to lever their positions, or retail investors borrowing via margin accounts to invest in various...
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INN caught up with cryptocurrency investment expert Dan Hoover to review the current landscape and where the market may be heading. The cryptocurrency investment marketplace has gone through severa...