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Traditional Finance Ideas Causing Mistakes in Cryptocurrency Industry

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On March 18th, Zhu Su, co founder of Sanjian Capital, stated on social media that most of the recent mistakes in the cryptocurrency industry are due to the intr

Traditional Finance Ideas Causing Mistakes in Cryptocurrency Industry

On March 18th, Zhu Su, co founder of Sanjian Capital, stated on social media that most of the recent mistakes in the cryptocurrency industry are due to the introduction of tradfi ideas, such as “shadow banking” and “process internalization”. The next round of cryptocurrency bull market will be driven by people who are aware of these issues. The underlying cryptocurrency infrastructure itself is a new paradigm.

Zhu Su: Most of the mistakes in the encryption industry are due to the introduction of traditional concepts such as “shadow banking”

Analysis based on this information:


The cryptocurrency industry has been experiencing some setbacks recently, and Zhu Su, co-founder of Sanjian Capital, believes that traditional finance ideas could be the source of the problem. In a statement made on March 18th, Su highlighted two concepts, “shadow banking” and “process internalization,” which he believes are responsible for most of the errors in the cryptocurrency industry.

Shadow banking refers to financial activities that occur outside the traditional banking system, such as unregulated lending and securitization. The nature of shadow banking makes it prone to risks such as unmonitored exposure, liquidity problems, and leverage. In the cryptocurrency industry, such activities have been prevalent, and it has led to a lack of transparency and oversight. This, in turn, opens up avenues for scams and fraudulent activities in the industry.

Process internalization, on the other hand, refers to the practice of handling a transaction or process within an organization without involving external parties. This concept has become popular in the traditional finance sector as a way of reducing costs and increasing efficiency. However, in the cryptocurrency industry, it has led to errors as most transactions take place on decentralized platforms that require external participation for verification.

Su believes that the cryptocurrency industry requires a new paradigm to address the challenges it faces. He notes that the underlying infrastructure of cryptocurrencies is unique, and traditional finance ideas cannot always be applied. However, the industry can learn from these concepts and develop crypto-specific ones that consider the peculiarities of the industry.

Despite the challenges facing the cryptocurrency industry, Su is optimistic about its future. He believes that the industry will experience a bull market in the next round driven by people who understand and can address the issues raised by traditional finance ideas. Crypto-specific concepts that factor in the unique infrastructure of cryptocurrencies will be the key to unlocking the full potential of the industry.

In conclusion, traditional finance ideas have had a significant impact on the cryptocurrency industry, leading to errors and setbacks. However, the industry has the potential to overcome these issues by developing new, crypto-specific concepts. The future of the cryptocurrency industry is promising, and a new round of bull market is anticipated.

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