Pantera Capital on What Went Wrong With Terra, Celsius, and Three Arrows Capital

Recently, Crypto investment firm Pantera Capital took a closer look at what caused the the recent troubles of the Teraa ecosystem, crypto lender Celsius, and Singapore-based crypto hedge fund Three Arrows Capital (3AC).

In the June 2022 issue of their firm’s monthly newsletter (“Pantera Blockchain Letter”), Pantera Capital gave their explanation for the the above-mentioned debacles in the crypto space. Below are some highlights from their comments about Terra, Celsius, and Three Arrows Capital.

Pantera comments about Terra, Celsius, and Three Arrows Capital

Terra

  • LUNA’s failure only means that that one type of algorithmic stablecoin didn’t work.
  • … most stablecoins, like Coinbase and Circle’s USDC are fully backed with treasury bills, very transparent, and audited.

Celsius

  • Celsius is a centralized crypto lending business.  Their business model is:  you deposit USDC, ETH, some sort of cryptocurrency, and they promise a yield on it.
  • What ended up happening is they put a bunch of those assets into either very risky projects or into things that have a long liquidity horizon.  Classic leveraged lending model – borrow short-term, lend long and risky.  The liquidity mismatch where you have customers who expect to be able to withdraw their funds within 24 hours, but you have assets that may be locked up for months.  Celsius ended up freezing withdrawals and were forced to sell a huge amount of crypto over the last week, which is part of what caused a cascade in prices.

Three Arrows Capital

  • Similar situation with Three Arrows Capital, known as 3AC.  Very leveraged with liquidity mismatches. They weren’t able to meet their margin calls.  They ended up being a forced seller in a time where there wasn’t that much liquidity in the markets.

About Pantera Capital

Pantera Capital launched the first cryptocurrency fund in the U.S when bitcoin was at $65 /BTC in 2013.  The firm subsequently launched the first blockchain-focused venture fund.  Pantera co-CIO Joey Krug co-founded Augur, one of the first decentralized applications built on Ethereum.  In 2017, Pantera Capital was the first to offer an early-stage token fund.

On March 25, Pantera Capital CEO and Co-CIO Dan Morehead was interviewed by Yahoo Finance’s Brian Chung. During that interview, Morehead was asked for his prediction of where Bitcoin’s price would be a year or two from now.

Pantera Capital founder and CEO Dan Morehead

“We’ve been doing this a long time, and Bitcoin has gone up 2.5X on average for 11 years, and sometimes it gets ahead of itself, and has a bubble, and sometimes it’s in a bear market, like it is now. And right now, I see 60% below that 11-year trend regression. So, our normal forecast is that a year from now, we’re going to be 2.5X higher. That puts you at about a $100,000 per Bitcoin. And although that number sounds crazy. I think it’s pretty likely to happen.“

He replied

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Foxy

Coincu News

Victor

Recent Posts

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

40 minutes ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

45 minutes ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

53 minutes ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

2 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

3 hours ago

Cosmos Developer Interchain Foundation Sold 3000 ETH Today

Cosmos Developer Interchain Foundation sold 3000 ETH from its ICO today, totaling 21,600 ETH sold…

3 hours ago

This website uses cookies.