A Hedge Fund Manager Saved His Company $50 million During the UST depeg
.Crypto currency is a indeed a land of opportunity where fortunes can be made and lost in the blink of an eye, May 2020 marked a pivotal moment that sent shockwaves throughout the industry.
I believe you still remember that was the day that the biggest sale off in crypto occured, which triggered the bear market that lasted for 4 years, although the market is recovering, but most people that was impacted didnt make it.
do you still remember how UST use to be that new guy in the building that seized the whole attention with their yield. even the giga brains never saw the loop holes.
if you don't remember what happened, let me refresh your memory, UST is an algorithmic stablecoin which was supposed to be backed with Bitcoin and other cryptocurrency, abruptly it depegged from the USD due to a massive selloff both in spot and leverage and when words get out on X, formally Twitter, people start redeeming there ust staked on Dex's and swap to other stablecoins/crypto.
A US.-Based court fillings relating to Terra revealed that over $40 billion of investors fund was wiped out resulting in both luna token and ust to literally Dip to zero.
The aftermath revealed a tale of betrayal and financial ruin, as the founder of Terra Network, Do Kwon, was discovered to have siphoned the Bitcoin reserves meant to back UST in case if it depegs into his personal coffers, this caused a panic spiral effect that made over $500 billion vanished from the whole crypto market.
However, amidst the chaos one hedge fund manager emerged as a beacon of hope for his company. His name: Johnathan Wells, the fearless leader of Nova Capital, a renowned hedge fund known for its savvy investment strategies and unwavering commitment to integrity.
As the UST debacle start unfolding, he was on a Twitter space where majority of the speakers still Believe that Do Kwon would utilize the reserve to buy back and save UST.
but Johnathan doesn't want to take chances as the fate of Nova Capital is hanging in the balance of UST, remember UST was treated as the golden child as marketed by many influencers as the only stablecoin that is solvent. nonetheless, he knew that decisive action was needed to safeguard his company's assets and protect his investors from major losses. While many in the industry clung to the hope that UST would recover, Johnathan recognized the harsh reality of the situation because he noticed on-chain that about $2 billion worth of UST was unstaked and hundreds of millions where sold immediately.
Armed with foresight and unwavering resolve, Johnathan made the critical decision to unstake all of Nova Capital's Luna paired with UST on Anchor Protocol, he swiftly liquidated their holdings and converting both UST and Luna to USDT and USDC, he managed to shield Nova Capital from over $50 million in potential losses, should I call this luck?.
this move is a saving grace for his company effectively preserving the financial health of his firm and I give him the accolades.
His actions should serve as a testament to the importance of being solvent, decisive leadership and sound risk management for times of crisis.
this Johnathan's story should serve as a beacon of hope that WAGMI if we don't let our fate to be decided by industry leaders as there are many bad actors in this space, at all time we should always take profit and maintain proper risk management and always remain solvent.
if you read till this far, I appreciate you
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