Close to 300 million people now in crypto – CZ’s view

Changpeng Zhao, the founder and CEO of Binance, today gave his views on the cryptocurrency market in an interview on Bloomberg TV. 

According to CZ, most people arrive in the crypto space via Bitcoin. They get to know about Bitcoin, and then many tend to branch out and investigate other cryptocurrencies and their smart contracts, NFTs etc. 

He says that these cryptocurrencies are needed for other types of transactions. He mentions Ethereum at this point and remarks that this is probably the reason that the second biggest cryptocurrency is rising. 

The interviewer talked about how many new entrants into the cryptocurrency space are lacking knowledge on many basic things like knowing what private keys are. They are unaware of the particular use cases pertaining to each cryptocurrency, and if too many people are just speculating on price alone then this could lead to “irrational exuberance” and “froth” in the market. 

CZ replied that he thought this type of investor was also in the traditional stock market and this wasn’t just a crypto phenomenon. He said these people just tended to follow the herd. He thought that this type of investor was probably more numerous than those that did the proper research and that this did lead to price volatility. 

The Binance CEO thought that this volatility would probably be less now for Bitcoin, than for similar sized assets in stock markets such as Tesla and Apple. 

When talking about the composition of customers on Binance, CZ said that there was about 70% of retail compared to around 30% of institutions, although institutional involvement was certainly rising. 

On the coming launch of the Binance NFT platform, CZ stated that this space was still at a very early stage. He said that he didn’t see a lot of interest yet from institutions here because of the “auction aspect” of NFTs. 

CZ was asked why Binance wasn’t thinking of going public, given the popularity and recent momentum of the exchange. He responded that going public was a good option for certain businesses that wanted to raise money. However, those businesses that were well funded and profitable didn’t need to follow this avenue. 

Finally, on being asked his views on the possible coexistence of cryptocurrencies and Central Bank Digital Currencies (CBDC). CZ said that this could happen as long as people were still willing to hold either or both.  

However, he said that the CBDCs would probably lack key elements of cryptocurrencies, such as being permissionless, having a limited supply, and more freedom of transactions. He also brought up the spectre of surveillance and control which are aspects of CBDCs. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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