A 60% plunge in the share price of Voyager Digital (VYGVF) since it disclosed its exposure to Three Arrows Capital (3AC) has been accompanied by further declines in crypto industry stocks.
According to data from the Trade View, VYGVF plunged as much as 60% during normal trading hours on June 22 before closing at $0.5998 to mark a decline of 50.84% for the day.
The sharp decline followed Voyager Digital revealing that potentially insolvent Three Arrows Capital (3AC) owed the company 15,250 Bitcoin (BTC) and 350 million USD (USDC) coins for a total value of around $660 million.
Voyager gave 3AC until Friday (June 24) to pay $25 million, and until the following Monday (June 27) to pay the full amount before the loan was considered in default. The company also said it was working with lawyers on how to take legal action against 3AC, if the supposed venture capital fund was unable to repay its debt.
Alameda Research has extended a 200 million USDC revolving loan and a 15,000 BTC revolving loan to cover Voyager’s current liquidity issues. The company also tightened its 24-hour withdrawal limit this week from $25,000 to $10,000.
“$10,000 better than $0 in Celsius,” Redditor AdLongjumping5010 commented in the Reddit subreddit r/CelciusNetwork in response.
Other crypto-related stocks continued to suffer. Coinbase (COIN) stock fell 9.71% to $51.91, while BTC-heavy MicroStrategy (MSTR) led by Michael Saylor saw its shares fall 4.50% to 170 $.91.
Coinbase at $14 billion is one of the dumbest things I’ve ever seen in public markets.
Rivaled perhaps only by Apple which was trading 50% above its cash balance at the end of 2008.
I can’t believe bad baby boomer pricing is pushing me to transfer money to a stonk account.
— Ryan Selkis (@twobitidiot) June 22, 2022
Crypto mining stocks also suffered notable damage, with Riot Blockchain (RIOT) losing 9.63%, while Bitfarms (BITF), Hut 8 (HUT), Marathon Digital Holdings (MARA), Core Scientific (CORZ) took all fell about 5-7% per year. room.
Related: SBF and Alameda step in to prevent contagion from crypto meltdown
The crypto stock price crash is just a microcosm of a broader downtrend in both stock and crypto markets in 2022, with the benchmark S&P 500 index in bearish territory and down 21%. 6% since the beginning of the year. This is the first time this has happened since 1970 according to Bloomberg data.
Related: Binance US makes BTC trading free as competitors feel the heat
Investors were generally spooked by the US Federal Reserve’s monetary policy and efforts this year to rein in inflation by introducing a series of interest rate hikes.
Fed Chairman Jerome Powell has kept his cards close to his chest on how the government body will bring inflation down lately, but suggested that as the Fed continues to raise the costs of borrowing, it could prepare for a recession.
Testifying before the Senate Banking Committee on June 22, Powell said “It’s definitely a possibility,” in response to a question from Democratic Sen. John Tester, adding that “it’s not the intended outcome, but it’s definitely a possibility.”