How Crypto Assets Geniuses Evaporated One Trillion Dollars

In the summer of 2022, a superyacht worth $50 million is set to launch off the coast of Italy. This luxury yacht, measuring 171 feet in length, is made of glass and steel, featuring a glass-bottom swimming pool, and is a lavish toy tailored for the new crypto asset elite. The yacht's captain has boasted to friends at parties about the ship's photos, claiming it "is bigger than all the yachts of the wealthy in Singapore," and plans to showcase NFT artworks in the cabin using a projector.

The yacht named "Much Wow" was supposed to be a symbol of the wealth myths surrounding Crypto Assets. However, in the same month that the yacht was set to launch, its buyer suddenly filed for bankruptcy and disappeared. This $150 million superyacht was abandoned at a dock in Italy, becoming a microcosm of the collapse of the cryptocurrency frenzy.

The buyers of the yacht are Su Zhu and Kyle Davies, two graduates of Andover University, who founded a Singaporean crypto hedge fund called Three Arrows Capital. During the frenzy of the crypto assets market, Three Arrows Capital once managed billions of dollars in assets, and Su Zhu and Davies became some of the most respected investors in the industry. However, as the crypto assets market crashed in 2022, Three Arrows Capital collapsed, dragging down the entire industry.

The collapse of Three Arrows Capital triggered a chain reaction, leading to a historic sell-off of Bitcoin, with one trillion dollars in market value evaporating in a short period. Many Crypto Assets companies fell into distress as a result, with some even filing for bankruptcy protection. Industry insiders generally believe that Three Arrows Capital bears significant responsibility for this round of Crypto Assets collapse in 2022.

Su Zhu and Davies were once stars in the Crypto Assets industry. They gained a large following due to their astonishing investment returns and optimistic predictions about the "crypto super cycle." However, in hindsight, their success relied more on high leverage and speculative investments rather than true investment talent.

The expansion of Three Arrows Capital was built on a large amount of borrowing. They borrowed heavily from various institutions and used these funds for speculative investments. When the market turned against them, they were unable to repay these debts, ultimately leading to the collapse of the entire company.

The collapse of Three Arrows Capital reveals prevalent issues in the Crypto Assets industry: excessive leverage, inadequate risk management, and lack of regulation. This collapse has made people realize that even the most successful companies in the industry may be built on fragile foundations.

The experiences of Su Zhu and Davies showcase the ups and downs of the Crypto Assets industry. They jumped from ordinary financial practitioners to billionaires, enjoying luxuries such as super yachts and mansions. However, when the market bubble burst, their wealth and reputation collapsed as well. This story serves as a warning from the era of Crypto Assets frenzy.

Today, Su Zhu and Davies have vanished, leaving behind billions of dollars in debt and a pile of unsolved mysteries. Regulators are investigating whether Three Arrows Capital engaged in fraudulent activities. Meanwhile, the superyacht named "Much Wow" has become one of the most ironic symbols of this era.