Three Arrows Capital invests $10 million in Chainlink (LINK) after Bitcoin crash

  • Three Arrows Capital (3AC) took advantage of the recent flash crash to buy 751,147 LINK, worth $10 million.
  • 3AC is one of the largest collateral firms in the Compound protocol with $156 million in various tokens.

According to a report by Nick Chong, the investment firm Three Arrows Capital (3AC) has invested an estimated $10 million in LINK. The firm made the purchase during Bitcoin’s flash crash when the cryptocurrency lost nearly $1,000 in less than an hour and then recovered back to $18,000. LINK had a drop from $14 to $12, an opportunity that 3AC took to make its investment.

The firm bought, according to Nick Chong, 351,147 LINK initially. Later, 3AC picked up an additional 400,000 LINK to accumulate 751,147 LINK. In total, it is estimated that Three Arrows Capital has an estimated $14 million in LINK placed at the address shown below. Chainlink LINK It appears that the funds acquired by 3AC are used as collateral in Ethereum’s DeFi protocol Aave in conjunction with 275 YFI. Regarding the investment in LINK, Chong notes that the collateral is used to acquire stablecoins:

3AC is withdrawing stables and sending them to FTX. We’ve seen millions upon millions sent to an FTX address. It is unclear what happens to the funds once they’re there but 3AC is often on the profit + volume leaderboards on FTX.

The firm is also part of the decentralized exchange SUSHI yield farming with $1.5 million allocated to the protocol’s governance token. In Compound, 3AC is a provider of $50 million in ETH, $6 million in DAI, and $100 million in WBTC.

On the same line, investment firm Polychain Capital was the largest purchaser of the protocol governance token (YFI) in the last five weeks with a purchase of 570 YFI. Some analysts believe that YFI could recover after its recent decline and reach a new all-time high of $100,000.

Another important player who is making a strong bet in the DeFi sector is Jump Trading. According to Chong, the firm has an approximate 39,000 ETH or $18.5 million accumulated during the last weeks. The firm also maintains tokens of the protocols Compound, Keep Network, Serum, HXRO, Numeraire, Orchid, Maker, and Huobi token. About the transactions of Jump Trading, Chong stated:

The ~$5m in stables in the address are being regularly sent to exchanges and seemingly swapped for altcoins. Jump is an accumulation machine. $100k+ incoming txes every few hrs.

Grayscale’s largest Bitcoin Investor

In a separate report from June, Coindesk revealed that 3AC has become the largest investor in Grayscale’s Bitcoin fund with the purchase of $200 million or approximately 6.5%. The report indicates that 3AC could employ a strategy that would allow it to benefit from Grayscale’s product (GBTC).

The strategy is to buy the shares at a certain price and then hold them for the 6-month period required by Grayscale. Once that is completed, 3AC can sell its shares at a premium rate that could range from 20% to 133%, according to the product’s fluctuation in 2020.

About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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