The CEO of leading crypto exchange Binance explains why the recent market crash bodes well for the long-term health of the digital asset markets.
In a recent CNBC interview, Binance CEO Changpeng Zhao said says that the crash in the crypto market was caused by the sudden influx of space speculators.
“I think a little reset is healthy to be very honest. Crypto drew a number of non-believers into the space. They are most likely just speculators and it really shouldn’t happen on a large scale. When it happens on a large scale, it means the fact that the market is overheated and after a while there will of course be a correction.
Usually the markets swing both ways. So, the crypto markets should only attract the believers, should only attract people who are in it for the technology, who understand how to use it, etc.”
According to the Binance CEO, the flush of weak hands triggered by the Terra/LUNA collapse is beneficial to the industry’s long-term outlook, as those who remained are likely to contribute to the overall growth of the crypto ecosystem.
“I think corrections are actually healthy. But given the Terra/LUNA crash, it hurts a lot of people, but then you also weed out a lot of the weak players in the industry. I actually think the industry is much healthier now than it was six months [or] nine months ago when Bitcoin was [at] $68,000 Now we’re seeing people who build applications stay in the business. Investors in the industry now have a long-term view. I actually think the industry is much healthier now than it was then [trading] at an all-time high.”
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