Singapore-based cryptocurrency hedge fund Three Arrows Capital (3AC) co-founder and CEO Zhu Su recently shared insights into his career journey, investment philosophy, and high-conviction sectors in an interview with Bloomberg. According to analytics firm Nansen, the fund's on-chain assets alone are valued at nearly $10 billion.
Early Crypto Adoption and Market Cycles
Zhu Su revealed he entered the cryptocurrency space in early 2013 when Bitcoin trading was primarily concentrated on Chinese exchanges. During this period, arbitrage opportunities were abundant. By late 2017, he recognized that cryptocurrencies would follow a dot-com boom-like cycle, ultimately becoming a paradigm shift spanning finance, technology, culture, and politics.
Three Arrows Capital's Investment Strategy
The fund maintains a dual focus:
- Derivatives trading as a core component of capital deployment
- Venture investments in emerging blockchain projects
"We operate without external investors, enabling rapid decision-making aligned with market cycles," Zhu Su noted. This structure allows continuous reinvestment into team growth during market fluctuations.
High-Potential Crypto Sectors
Zhu Su subscribes to Amara's Law in crypto investing—the tendency to overestimate short-term impacts while underestimating long-term transformation. His observations include:
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- Layer 1 Innovation: Projects like Avalanche demonstrate rare scalability, though network effects at scale (100M+ users) remain unpredictable
- Web3 Disruption: Most current Web2 applications will eventually be replaced by lightweight, community-owned Web3 alternatives
Standout Investments
Successful Bets:
- Deribit: Crypto options exchange invested during bear market conditions
- Layer 1 Protocols: Early OTC investments in Avalanche (AVAX), Solana (SOL), and Polkadot (DOT) that rewarded technical teams
- Axie Infinity: The fund's best-performing venture despite initial skepticism about its seed round viability
Lessons from "Failures":
Zhu Su maintains no investment regrets, emphasizing that even losses provide value through attempted innovation. He cited Facebook's Libra project as an example where mainstream enthusiasm didn't guarantee success.
Future Direction
Three Arrows Capital will continue its core mission—investing in crypto assets while supporting long-term builders and communities. "Supporting technically-driven teams through market cycles creates lasting impact," Zhu Su concluded.
FAQ: Zhu Su's Investment Philosophy
Q: What makes Axie Infinity a standout investment?
A: Its play-to-earn model demonstrated early Web3 adoption potential despite initial fundraising challenges, validating 3AC's conviction in gaming/NFT convergence.
Q: Why focus on Layer 1 blockchains?
A: Foundational protocols like AVAX and SOL solve critical scalability issues that enable mass adoption, making them asymmetric bets.
Q: How does Three Arrows Capital manage risk?
A: By maintaining operational flexibility (no external LP pressure) and investing across market cycles—bull markets for growth, bear markets for infrastructure.
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