Voyager Digital’s 60% Slide Leads the Sell-off for Crypto Equities

Market turmoil is not expected to let up until a shift in monetary policy occurs, analysts said

article-image

blockworks exclusive art by axel rangel

share

key takeaways

  • Voyager reveals Three Arrows Capital is at risk for defaulting on a $657 million loan
  • The sell-off comes as senators weigh likelihood of a recession

Crypto-related equities fell Wednesday — along with the broader market — as investors continue to parse contagion risks from lending firm Celsius’ liquidity crisis

“Unfortunately, crypto equities are going to get penalized if either crypto or tech, or both, are down,” said David Tawil, president and co-founder of Prochain Capital. “However, I expect that the same will be true to the upside, eventually…if we are at or near a bottom in crypto and/or equities, I think that it’s a good entry point.” 

Crypto broker Voyager Digital led the decline, at one point losing as much as 60% during Wednesday’s trading session, following its disclosure that the company had exposure to potentially insolvent hedge fund Three Arrows Capital.

Voyager said Three Arrows currently has an outstanding loan of around $657 million, and the broker may issue a default if the full amount is not paid by June 27. 

“This new revelation may have some investors wondering if these unscrupulous business practices between lender and borrower are commonplace in the industry, with further trouble yet to be announced,” said Josh Olszewicz, head of research at crypto fund manager Valkyrie Investments. “Multiple crypto lenders reporting liquidity issues over the past few weeks has also bred fear in the market broadly and led to a general contraction in available credit.”

Exchange Coinbase, business intelligence firm MicroStrategy and digital asset mining company Marathon Digital also all posted losses Wednesday. Coinbase at one point lost 7% while Microstrategy, which has been trending down for several months, shed as much as 8.5%.

The sell-off comes as markets react to Federal Reserve Chair Jerome Powell’s testimony before the US Senate Banking Committee Wednesday. If interest rates increase at a steep pace too quickly, senators warned, a recession could be the result. 

“It’s certainly a possibility, it’s not our intended outcome at all,” Powell said. “We are not trying to provoke, and I don’t think we will need to provoke, a recession.” 

Market turmoil is not expected to let up until a shift in monetary policy occurs, analysts said. 

“Fading stock market bounces will still remain the go-to trade on Wall Street until the economic data dramatically weakens and the Fed pivots so that they may ease up their tightening of policy strategy,” Edward Moya, senior market analyst at OANDA, said.

For crypto-related equities, specifically, Tawil added that contagion fears need to be eased first and foremost. 

“The market definitely needs to see at least one week without any additional blow ups or fissures to declare that the contagion is over,” Tawil said. “Deleveraging will continue, and there will continue to be weakness in enterprises with remaining questions of stability, but the forced selling for this round will be over.”

[stock_market_widget type=”accordion” template=”chart” color=”#6B3EE5″ assets=”VYGVF,COIN,MSTR,MARA” start_expanded=”true” display_currency_symbol=”true” api=”yf” chart_range=”1mo” chart_interval=”1d”]


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Also in the tokenized fund space, Franklin Templeton launches on Base and Securitize hits $1 billion in tokenized RWA onchain

article-image

It turns out that bitcoin never actually hit an all-time high in March. Thanks a lot, inflation.

article-image

Spire, Citrea and Nillion also announced raises this week

article-image

The latest recipient of an SEC Wells notice is a Web3 gaming company

article-image

Thursday’s selloff was led by tech stocks, triggered by disappointing outlooks from giants Meta and Microsoft

article-image

Historically, positive returns have been a bit more of a toss-up during the year’s 11th month