H.C. Wainwright analyst Kevin Dede on Tuesday has cut cryptocurrency brokerage Voyager Digital (OTCQX:VYGVF) to Neutral from Buy on the basis of liquidity concerns. The downgrade followed Voyager's (OTCQX:VYGVF) move to suspend platform trading, deposits, withdrawals and loyalty rewards last week after it issued a default notice to troubled hedge fund Three Arrows Capital amid turbulent crypto market conditions. "With withdrawals now suspended, it seems most likely customers lose faith in the platform's viability, and if and when able to withdraw funds in the future, may flee in droves in behavior similar to the bank run in 1933—there is no FDIC insurance on crypto assets," Dede wrote in a note to clients. Looking at SA contributor Frances Coppola's bearish take on Voyager Digital (OTCQX:VYGVF), nearly 60% of its loan book (50% of total assets) consisted of loans directed to Three Arrows Capital, implying that `28% of Voyager's assets are in default. As shares of the crypto brokerage sink over 97% YTD, the Quant Rating, which warned investors in the beginning of June that VYGVF was at high risk of performing badly, screens the stock as a Sell with the poorest marks in momentum and revisions. In mid-May, Voyager Digital cut to Neutral at Compass Point on crypto market headwinds.
