Su Zhu, a cryptocurrency expert, explains what caused the Bitcoin crash and what will happen next.

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Su Zhu, CEO of crypto investment company Three Arrows Capital, discusses what triggered Bitcoin’s crash in late May and where the crypto markets are heading next.

In a new interview on the Uncommon Core podcast, Zhu claims that a convergence of Bitcoin’s rising price action and a slew of unfavourable headlines likely sparked the massive sell-off that wiped out more than half of BTC’s value.

Zhu brings up the possibility of a Bitcoin mining shutdown in China, as well as Tesla CEO Elon Musk’s comments criticising the flagship cryptocurrency for what he considers to be ecologically unsustainable qualities.

“I think there was a lot of news that came out around then that was a bit bearish especially out of China regarding mining, but then also in the US with Elon’s tweets about Tesla and Bitcoin energy usage… Those are not the proximate causes, but they were some of them, and I do think that the market took that as a shelling point to start taking profits. So I think that it was a culmination of that plus the fact that people who had been buying throughout kind of said ‘Okay if I just wait then I could get it at a much lower price, so I’ll just wait.’ 

So I believe it was a combination of those two things that pushed it through, but if you look at how the markets have rebounded, you can see that those buyers are still present. It’s only an issue of how much they can obtain. They had to buy at higher and higher prices in the start and middle of this run, but this time they were able to get some at cheaper costs than before.

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The bottom line is that there is still a lot of buying demand.”

 

During the interview, Zhu claims that “the bull run is definitely not over,” and that decentralised finance (DeFi) is going to make a significant penetration into the financial system as investors find the higher returns and instruments.

According to the crypto expert, the latest poll revealing that hedge funds are preparing to invest hundreds of billions of dollars in crypto is also a massive positive trigger that may significantly enhance the digital asset markets.

 

“The reality is that once you have this infiltration and people are used to this idea of digital scarcity and this kind of floating around, then you will have a whole new set of natural buyers that come in when there’s dips. These people are trading these assets as just like instruments like copper or another commodity. They will also find reasons to buy it and also find reasons to sell it, and so I think that whole process is something that is very, very bullish long term because it broadens the base of holders massively.”

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