Three Arrows Fail Could Sink Crypto, Musk Faces Billion Dollar Lawsuit Over Dogecoin Pyramid Scheme And Watch Out For Bear Market Rallies
As markets continue to sink over fears the rising interest rates will send the global economy into recession, there are more stories out there in the cryptosphere that we can cover, so let’s give an overview of the most important risks you should this weekend be aware of. Let’s go.
Three Arrows Could Sink Crypto
There’s growing speculation that a major crypto fund called Three Arrows Capital (known as 3AC in the cryptosphere), which manages an estimated $10 billion in digital currencies, might have become insolvent and have large positions that could be liquidated. This would send crypto markets further down.
3AC situation is even worse than I thought.— Alex Svanevik🐧 (@ASvanevik) June 16, 2022
Cofounder Su Zhu was initially very silent on the rumors in the market, then seemed to acknowledge the turbulence, tweeting:
We are in the process of communicating with relevant parties and fully committed to working this out.
Rumors - some second hand - re 3AC:— Ryan Selkis 📖 🖊🔑 (@twobitidiot) June 17, 2022
+ $1.0-$1.5bn in net liabilities
+ Most of the big lenders are fine now, even if they had some exposure (Blockfi, Genesis), tbd on others
+ The Founders have ghosted everyone, including their own team
+ Defiance Capital may be done
Will be interesting to see how this plays out.
Musk Faces Billion Dollar Lawsuit Over Dogecoin Pumps
We’ve warned on this site multiple times for the possibility that Elon Musk could face a lawsuit for alleged Dogecoin pumps (aka the fact that Dogecoin goes up whenever Musk mentions it).
Musk, Tesla, and SpaceX hit with civil RICO case in the Southern District of New York https://t.co/es2nkT96jw— Eric Garland (@ericgarland) June 16, 2022
By now, this is exactly what has happened, although we feel that the amount requested by the wronged investor might be a bit much. Keith Johnson, who says he lost money after investing in dogecoin, filed a $258 billion lawsuit against Elon Musk and his companies Tesla and SpaceX for what he called the “Dogecoin Crypto Pyramid Scheme.”
Johnson says he is an “American citizen who was defrauded.”
We declared already earlier this week that lawsuit would soon be coming in the US because of the crypto crash of 2022.
Watch Out For Bear Market Rallies
Lastly, we do wanna give you some market wisdom in these turbulent times. Whereas we always claim that you should do your own research, be sure to take this into account as well.
Beware of so-called bear market rallies, like worldwide stocks saw last week. These are simply short term relief rallies which could become a bear trap and force you to each time ‘buy the dip’.
As market ‘savant’ Michael Burry explained earlier this year:
Dead cat bounces are the most epic. 12 of the top 20 biggest Nasdaq 1-day rallies happened during the 78% drop from 2000’s top. 9 of the top 20 S&P 500 1-day rallies happened during the 86% drop from the 1929 top.
Safe trading out there.