[Bitcoin Now] Aftermath of 3AC Bankruptcy Continues... $20,000 Level 'At Risk'

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] The price of Bitcoin, the leading cryptocurrency, is precariously hovering around the $20,000 mark amid the ongoing fallout from the bankruptcy of cryptocurrency investment hedge fund Three Arrows Capital (3AC).

According to CoinMarketCap, a global cryptocurrency market tracking site, as of 10:45 a.m. on the 30th, Bitcoin was priced at $20,031 (approximately 26.03 million KRW), down 1.73% from the previous day. Bitcoin, which had been trading above the psychological support level of $20,000 for investors, briefly fell below $20,000 on this day.

Bitcoin has been on a downward trend following 3AC's default and subsequent bankruptcy announcement. 3AC, which had been experiencing a liquidity crisis due to the recent Terra Classic USD (UST) and Luna Classic crash, reportedly went bankrupt after defaulting on its debts. The Wall Street Journal (WSJ) reported on the 29th that 3AC was declared bankrupt by a court in the British Virgin Islands on the 27th (local time).

3AC's bankruptcy was decided immediately after it defaulted on its cryptocurrency debts to digital asset brokerage Voyager Digital. It is reported that 3AC failed to repay Voyager Digital $350 million worth of the stablecoin USDC and 15,250 Bitcoins valued at approximately $304.5 million.

Edward Moya, Senior Market Analyst at global investment firm OANDA, commented on 3AC's bankruptcy, saying, "Negative news continues to hit the cryptocurrency market," and "Concerns are growing that 3AC's collapse will have a greater impact on the market."

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded a level of 24.38 on this day, indicating a 'Fear' stage. This is a decrease of 6.81 from 31.19 (Fear) a week earlier. Dunamu's Digital Asset Fear & Greed Index is divided into stages: 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. A greed direction indicates increased buying interest among market participants, whereas a fear direction reflects a growing fear of asset decline, leading to market exits and a chain reaction of price drops.