Why Did Three Arrows Capital Fail?
$10B Crypto Fund, Zero Risk Management
📜 What Happened
3AC's founders were crypto's smartest bulls — $10B at peak, borrowing from every lender in the industry, often uncollateralized, to buy more crypto. Their thesis: a 'supercycle' where prices basically don't crash again. They piled into Luna; Luna went to zero. Margin calls cascaded, 3AC ghosted its lenders, and its bankruptcy dominoed through Celsius, Voyager, and BlockFi. The founders went untraceable while liquidators chased yachts.
☠️ The Fatal Mistake
Borrowing billions against volatile assets with a thesis that required volatility to be over — leverage stacked on faith.
🧠 The Lesson (Free for You)
'This time is different' is the most expensive sentence in finance. Any strategy that only works if crashes are extinct is not a strategy — it's a countdown with a management fee.
📕 The Antidote Book
We are hardwired to see skill in what is mostly noise. Taleb's opening thought experiment: put enough monkeys at typewriters and one types the Iliad — would you bet the next book on that monkey? Yet that's exactly what…
📖 OPEN THE FULL INTERACTIVE BREAKDOWN →Searchable, filterable, free to read — they paid billions; your lesson is free.