Crypto Hedge Fund Three Arrows Capital Snaps Up $400M in ETH
The move comes mere weeks after co-founder Su Zhu “abandoned” Ethereum over its prohibitively high fees for new users.
Three Arrows Capital, a cryptocurrency hedge fund founded in 2012 by Su Zhu and Kyle Davies, reportedly bought $400 million worth of ether over the weekend.
Zhu of Three Arrows responded to the tweet by saying that “100k eth is dust,” and that there’s “more coming.”
Zhu said in a Telegram chat with CoinDesk that the hedge fund is bullish on ETH because the macro environment has become calmer and that “both U.S. and Chinese stock markets are healthy.”
“It now appears like a healthy flush out of leverage after weeks of excess and dispersion,” Zhu said.
“Many overleveraged crypto derivative positions were stopped out,” Zhu added. “Leading up to this, many different coins had gone up substantially and people were asking what’s next constantly.”
The move is especially notable given Zhu’s recent disavowal of Ethereum, claiming “zero newcomers can afford the chain” because of its high transaction fees.
The Nov. 20 tweet caused a weekend uproar among Ethereum diehards.
Read more: Ethereum’s Fees Are Too Damn High
Ether has outperformed bitcoin in the last year and may continue to do so as investors remain focused on the broader economy.
CoinDesk’s Omkar Godbole wrote on Monday that analysts view ETH’s newfound deflationary asset credentials and impending transition to proof-of-stake as ways to help the cryptocurrency stay resilient.
Ether is up 500% year to date, and is trading at around the $4,300 mark at press time. Bitcoin, the world’s largest cryptocurrency by market capitalization, is up 70% year to date and is trading at around $50,200.
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