- Su Zhu believes that the Chinese decision to shut down BTC mining factories and Elon Musk twee also impacted the asset.
- May was not a good month for crypto supporters and investors as the entire crypto bled.
Su Zhu, the founder of Three Arrows Capital, has shared what he thinks caused the recent Bitcoin crash. May was not a good month for crypto supporters and investors. The entire crypto market bled as the largest digital asset dropped slightly above $30k.
In an interview, Su Zhu said, a confluence between Bitcoin’s soaring price action and a series of bearish news might be the cause of the crash of the largest digital asset, which reduced Bitcoin’s value by more than half.
Su Zhu also thinks the Chinese decision to shut down BTC mining factories and Elon Musk twee also impacted the asset.
Musk on Bitcoin
On May 12, the CEO of the electric-powered automobiles shared a tweet, dismissing BTC payments. Musk argued that the largest digital asset uses a lot of fuel energy, Hence dangerous to the environment. This news flooded the social media platforms last month. After Musk dismissed BTC payments, the price of the largest virtual currency began a sharp downtrend. Su Zhu believes that this one of the causes of the big sell-off experienced towards the end of May.
Chinese BTC regulation
After the Tesla dismissal of Bitcoin payments over environmental concerns, a week later Chinese government woke up. They ordered the BTC miners to quit their operations in the country. The government said Bitcoin miners are bringing down their efforts to fight global warming. Some of the cities in China have acted on the same, sending out BTC miners out of their jurisdiction. Ya’an is the latest city that has ordered Bitcoin miners to quit operations.
Su Zhu “Bottom line is there is still a tremendous amount of buying demand.”
According to Su Zhu, a recent survey showing hedge funds is planning to invest billions of dollars into cryptocurrency. This mega bullish catalyst could immensely strengthen the virtual currency markets.
The cryptocurrency guru said that once people are used to digital scarcity, they will have a whole new set of natural buyers when the market is bearish. He said that natural traders trade virtual currencies like other commodities. He added, such traders usually find reasons to buy or sell digital assets.