Su Zhu: 'The Supercycle Is Here' - Then 3AC Collapsed

He said crypto would never have another bear market. Then his fund blew up for $3 billion.

Su Zhu, Three Arrows Capital

In 2021, Su Zhu of Three Arrows Capital (3AC) popularized the "supercycle" theory. The idea: institutional adoption, ETFs, and sovereign wealth fund interest meant that crypto's traditional four-year boom-bust cycle was over. There would be no more bear markets. Only dips and higher highs.

The crypto world loved it. The supercycle theory justified maximum leverage, maximum risk, and maximum exposure. If there is no bear market coming, why hedge? Why take profits? Just keep buying. Su Zhu was not just theorizing - 3AC was putting billions behind the thesis, using borrowed money to build enormous leveraged positions.

In 2022, LUNA collapsed, and Three Arrows Capital could not meet its margin calls. The fund blew up owing over $3 billion to creditors including Genesis, Voyager, and BlockFi. The entire crypto market lost 70% of its value. The supercycle was dead. The man who said bear markets were over had just triggered the worst one since 2018.

3AC's collapse was the domino that killed the rest. Celsius froze withdrawals. Voyager filed for bankruptcy. BlockFi went under. Genesis defaulted. The fund that said the cycle was broken became the cycle's most devastating chapter.

Su Zhu and co-founder Kyle Davies initially fled to Dubai. Su Zhu was eventually caught attempting to leave Singapore in September 2023 and was sentenced to 4 months in prison for obstruction and contempt. Four months. For blowing up $3 billion. Kyle Davies has still never been caught. He is believed to be somewhere in Bali, posting on Twitter.

The supercycle theory returns in some form every bull market. In 2025, it was "ETFs make this time different." The vocabulary changes. The outcome doesn't.