"When life gives you lemons, squeeze them into people's eyes!"- The crypto tokens, on the verge of death in the bearish market and amidst bankruptcy, are trying their best to put this proverb into use.
VGX, the native token of the bankrupt crypto brokerage Voyager Digital skyrocketed by more than 600% in a span of two days before dumping hard and the credit goes to a "small squeeze". On Wednesday, Voyager's VGX token surged 178% to hit an intraday high of $0.891 before falling back to around $0.559, according to CoinGecko. Then, hours later the coin again hit the $1 mark. However, the good times did not last long as it again slipped 97% in a few more hours.
Before, going into further details, let me explain how this squeeze thing works. A short squeeze occurs when investors bet that the price of an asset will drop, however, the heavily shorted asset goes up fast instead, thereby forcing them to close their positions. Experts believe that the recent frenzy of #PumpVGXJuly18 may also have helped catapult some of the price action. The campaign to pump the token was initiated by a Twitter account called MetaformLabs, which claims to be "a bunch of very early crypto investors." The overall goal is to ensure Voyager has "enough on the table" to function as they were before the implosion of 3AC. MetaformLabs, however, asserted that they have not initiated the pump.
The Bankruptcy Condition of Voyager Digital
Voyager Digital filed for Chapter 11 bankruptcy protection on July 6, citing the default of Three Arrows Capital. 58% of its loan book consisted of loans to the now-insolvent hedge fund. A week before, the Toronto-based crypto lender suspended trading, deposits, and withdrawals for its users. It announced a restructuring plan that would entail issuing VGX tokens to customers who have suffered losses after the suspension of trading. However, Voyager came under investigation from the US Federal Deposit Insurance Corporation (FDIC) for claiming that funds were FDIC-insured. Shortly after, the brokerage firm updated on its restructuring plan and clarified that while its USD deposits are safe, it cannot guarantee what portion of its crypto will be returned.
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