Six months before the collapse of FTX in November set off a crisis in cryptocurrency, there was another cataclysmic event: The stablecoin Terra blew up, wiping out around $1 trillion in value, and triggering a cascade of crypto company failures. The collapse of Terra came as a shock to most—but not to everyone.
A hedge fund called Galois Capital was among the few that smelled something rotten at Terra, and took a short position—betting that the price of Terra’s twin cryptocurrencies would fall. The bet paid off, and Galois made a profit, earning plaudits for making a smart decision at a time when the rest of the crypto world thought Terra prices would go to the moon.
