Bitcoin News: Su Zhu, CEO of crypto investment fund Three Arrows Capital, offered his insights on what caused Bitcoin‘s late May crash and the next direction of the crypto market.
In his new interview on the Uncommon Core Podcast, Zhu says that the combination between Bitcoin’s rising price action and bearish news triggered massive sell-offs that lost more than 50% of BTC’s value.
Zhu refers to the shutdown of potential Bitcoin mining in China and Tesla CEO Elon Musk’s tweets denouncing Bitcoin for what he sees as environmentally unsustainable features.
“I guess it was a bit of a downside from China back then, especially on mining, but then there was a lot of news in the US about tweets from Elon, Tesla and Bitcoin about energy use. These are not all reasons, but they were some of them, and I think the market took that as a firing point to start making profits. So I think it’s a climax, and also the result of people buying from the start thinking “if I wait I can get it for a much lower price, so I’ll wait”.
So I think there was a culmination of these two factors that enabled it, but if you look at the way the markets bounced, you can see that those buyers are still there. It only matters what price they buy. At the start and middle of this run, they had to buy at much higher prices and this time they managed to get some at lower prices than before.
As a result, there is still a tremendous amount of purchase demand.”
In the interview, Zhu claims that “the bull run is definitely not over” and that decentralized finance (DeFi) is about to make a big entrance into the financial institution as investors discover superior returns and instruments.
According to the crypto expert, the latest survey showing that hedge funds are planning to invest hundreds of billions of dollars in crypto is also a mega bullish catalyst that could immensely boost the digital asset markets.
“The truth is, once you witness this intrusion and people get used to this idea of digital currency inadequacy and this kind of market navigating, you’ll have a whole new set of natural buyers that come when there are dips. These people buy and sell these assets just like instruments like copper or any other commodity. They will also find reasons to buy and sell it, and so I think the whole process is a very, very long-term thing. Because its owners are massively expanding its base.”