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Crypto-focused hedge fund Three Arrows Capital collapses amid turmoil in digital currency markets

Crypto-focused hedge fund Three Arrows Capital collapses amid turmoil in digital currency markets

A crypto-focused hedge fund has collapsed into administration amid a crisis in digital currency markets.

Singapore-based Three Arrows Capital was pushed into insolvency after a bruising few weeks that sparked warnings the industry faces a harsh ‘crypto winter’.

Rising inflation and fears of an economic downturn have hit demand for high-risk assets. 

Fund collapse: Singapore-based Three Arrows Capital was pushed into insolvency after a bruising few weeks that sparked warnings the industry faces a harsh ‘crypto winter’

Three Arrows’ collapse came after Voyager Digital, a crypto broker, said the hedge fund had fallen into default after failing to make repayments on a loan of 15,250 bitcoin, worth around £252million.

The fund’s liquidation has been ordered by a court in the British Virgin Islands.

While the immediate effects of the collapse are unclear, the fate of Three Arrows will increase concerns that others could fail.

Prices have hit multi-year lows after their value surged to meteoric highs in 2021.

Bitcoin is down over 70 per cent from its high last November. Ethereum has fallen by around 77 per cent. 

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