Voyager Digital experienced losses of up to 60% during trading hours before ending at $0.5998, representing a 50.84% loss for the day.
The share price of Voyager Digital has fallen by 60% after it announced its connection to Three Arrows Capital (3AC), and stocks in the cryptocurrency sector have also fallen.
Voyager Digital fell as much as 60 percent during regular trading hours on Wednesday before ending at $0.5998, representing a loss of 50.84 percent for the day.
Voyager Digital said that Three Arrows Capital (3AC), which may be insolvent, owes the company 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC), totaling around $660 million, which prompted a steep decline.
Voyager has given 3AC till June 24 and June 27 to make their payments in full before the loan would be deemed in default. The business added that it is consulting with attorneys on how to take legal action against 3AC should the fictitious venture fund be unable to pay back its loan.
In order to address Voyager’s present liquidity issues, Alameda Research has issued a 200 million USDC and a 15,000 BTC revolving credit. The business also reduced this week’s 24-hour withdrawal cap from $25,000 to $10,000.
AdLongjumping5010 replied in the sub-Reddit r/CelciusNetwork, “$10,000 better than $0 at Celsius.”
Other stocks with a connection to cryptocurrencies were falling. While the substantially BTC-exposed MicroStrategy, managed by Michael Saylor, saw its shares fall 4.50 percent to $170.91, Coinbase stock fell 9.71 percent to $51.91.
Stocks of cryptocurrency mining companies also suffered significantly, with Riot Blockchain losing 9.63 percent, Bitfarms, Hut 8, Marathon Digital Holdings, and Core Scientific all losing between 5-7 percent each.
With the benchmark S&P 500 Index in the bear market territory and down 21.6 percent since the year’s beginning, the falling prices of cryptocurrencies are merely a microcosm of a more general decline in the stock and cryptocurrency markets in 2022. Bloomberg figures show that this is the first time it has occurred since 1970.
The US Federal Reserve’s efforts to control inflation this year by implementing a number of interest rate hikes have generally alarmed investors.
Jerome Powell, the chairman of the Fed, has recently been mum about how the organization will control inflation, but he did make the suggestion that while the Fed keeps driving up borrowing costs, it might be preparing for a recession.
In his Wednesday testimony before the Senate Banking Committee, Powell said:
“It’s certainly a possibility,” in response to a question from Senator John Tester, adding that “It’s not our intended outcome, but it’s certainly a possibility.”