SBF

Chapter 34Looks Fucking Good

Su Zhu, the cofounder of the hedge fund Three Arrows Capital, had become a bull market guru in the crypto space. He had made a bold prediction and said he was trading based on it.

His prediction was this: the price of bitcoin would not fall dramatically again. His thesis was that this cycle was different. Real institutional money had finally come into the industry, and it would be enough to maintain a new base level into perpetuity.

Historically, bitcoin loses anywhere from 80 to 90 percent of its value from the peak of each bull run. Longtime bitcoin fans don't mind this because the floor keeps getting higher. This means they can take profits in the bull runs and then they can buy cheap again once it's over, while their overall portfolio grows in value—so long as they think in years, not weeks.

Rinse and repeat. Just another day in Satoshi's office in the sky.

People have gotten rich operating as if this is a fait accompli.

But Zhu argued through 2021 that those traders would be disappointed this time. Bitcoin wouldn't crash that hard again. We had found a new normal. He called it “the super‐cycle.” This created urgency for people who heard him make his case. It made people feel like they should get in or be forever left behind.

There's nothing wrong with being wrong. Making a bold trade is what makes investors. Your LPs can afford to take a hit.

The problem is that Zhu didn't stop when it looked very likely that he'd been wrong. Instead, he appears ...