- Former Credit Suisse traders Kyle Davies and Su Zhu started a firm that now owns billions in crypto.
- Their largest cryptocurrency holding is in Ethereum, Bloomberg reported.
- They were unphased by last week’s crypto sell-off amid concerns over energy use.
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Crypto whales Kyle Davies and Su Zhu have billions of dollars worth of cryptocurrency in their portfolios — and tweets from Tesla CEO Elon Musk and concerns over energy use aren’t phasing them.
An article from Bloomberg, titled, “Ex-High School Classmates Are Among the World’s Largest Crypto Holders,” details how the pair of 34-year-olds quit their jobs as Credit Suisse derivatives traders after three years and started Three Arrows Capital, which has focused exclusively on cryptocurrency for the past three years.
Three Arrows Capital, based in Singapore, owns a 5.6% stake in the $22 billion Grayscale Bitcoin Trust, making the firm the largest shareholder, Bloomberg reported, citing a January filing. Davies and Zhu, who have advised crypto billionaires on Twitter to remain quiet on their fortunes, didn’t reveal to Bloomberg how much of their firm’s capital belongs to them or other direct cryptocurrency investments.
But, Davies said the firm’s largest cryptocurrency holding is in Ethereum. Investing in Ethereum is the “best way to beat bitcoin,” and beating bitcoin is their “ultimate goal,” he told Bloomberg. Three Arrows Capital did not immediately respond to Insider’s request for comment for the story.
The two have been vocal on Twitter about their bullishness in Ethereum and crypto in general. Following last week’s volatility, Zhu said he “didn’t sell any ETH or DeFi on the way down and own more ETH today than ever before.”
—Kyle Davies (@kyled116) May 23, 2021
—Zhu Su (@zhusu) May 24, 2021
With Three Arrows Capital, the two started a fund called DeFiance Capital, which is a “Decentralized Finance (DeFi) focused cryptoasset fund” betting that “DeFi will eat traditional finance during the next decade.”
Musk said Tesla may dump bitcoin because of energy use, creating turmoil for the cryptocurrency. But as for his influence over the market, Davies told Bloomberg outsized voices “usually don’t last very long if they’re used too much.”
With regard to concerns over energy use, Davies said it doesn’t apply to all of crypto, as those that use very little electricity is “the direction that a lot of crypto is headed in.”
According to an estimate from the University of Cambridge’s Bitcoin Electricity Consumption Index, Bitcoin mining consumes more than 113 terawatt hours per year, slightly more than the Netherlands, which consumes 110 terawatt hours.
Ethereum, for its part, is trying to switch to a proof-of-stake system, which reduces the carbon emissions problem of the proof-of-work system currently used by Ethereum and Bitcoin that needs a global network of computers running 24/7, Fortune reported.
The proof-of-stake system is already used by other cryptocurrencies such as Cardano, Polygon, Tezos, Polkadot, and EOS, NBC News reported.