I have learn the leaked filings from the 3AC BVI(British Virgin Islands) courtroom proceedings.
Let me summarize what went incorrect with 3AC.
Luna/Terra Blow up
3AC misplaced around $600 million when Luna/Terra blew up. Nevertheless, it was not that problematic for them. Nevertheless, this blow-up resulted in the following occasions.
Market Crash - Luna/Terra has around $40 billion market cap, and it went to zero in three days. There have been a number of liquidations and a whole lot of sell strain. 3AC wasn't ready for this. (I will clarify in a bit)
Credit score Crunch - As a result of the market tanked and lots of lenders have money locked now with borrowers, they usually do not have money to offer more loans, or even when they've, they turned cautious. This created a credit crunch out there, and 3AC can.'t borrow any more without collateral as a result of they have been locked in Long positions.
Supercycle Thesis
So 3AC has a supercycle thesis through which Bitcoin and different belongings are within the mid of the supercycle and never going to face any bear market in the close to market. So principally, they are like, "To the moon, baby". So when BTC went $30okay, they have been kind of OK. Nevertheless, they have been by no means prepared for $20okay, and because of Terra/Luna, Bitcoin went from $30okay to $20okay pretty quick, and a variety of Altcoins misplaced lots of valuation too.
Because of this, 3AC was getting referred to as margin referred to as from all over the place as a result of that they had long positions, and to reserve it, they wanted to borrow extra, but they didn't have any collateral.
So, in summary, they didn't manage danger appropriately and obtained rekt. There are some juicy particulars within the BVI courtroom filings, and I created a video on it. Please verify the hyperlink under.
https://www.youtube.com/watch?v=a1FB4_IYGlA
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