Binance’s CZ believes the crypto market is much healthier with BTC around $20K
Crypto exchange giant Binance CEO Chaopeng Zao (CZ) gave another interview CNBC where he argued that the market is much healthier in the current winter conditions because only crypto-believers are left in the field.
He said:
“A little reset is healthy, to be honest. […] the crypto attracted a number of nonbelievers in space. They were most likely just speculators.”
By November 2021, the crypto market cap had reached an all-time high of $3 trillion, while Bitcoin had seen as much as $69,000. After the ravages of the coldest winter to date, the crypto market barely regained $1 trillion in market cap as Bitcoin neared $24,000 on July 28.
CZ added:
“I actually think the industry is now much healthier than it was with Bitcoin at $68,000.”
Market cleaning
CZ mentioned Terra crash causing a domino effect collapse in the sphere, taking giants like 3AC and Celsius down with it. However, CZ approached the failure with a long-term perspective, saying that such swings purge the market of non-believers.
He explained that when Bitcoin was trading at around $68,000, many non-believers entered the area on a large scale to chase quick gains. He said:
“[Speculators entering the market] should not happen on a large scale. When it happens on a large scale, it means the market is over, [high] hot. And after a while there will of course be a correction.”
According to CZ, the crypto market should only attract believers for the technology. While the bear market shakes off the non-believers, CZ said, the market is much healthier. People who know the value and understand how to use the technology can enter the space to innovate now.
Prominent names agree
Since the Terra disaster tipped the market over the cliff, prominent crypto leaders have made similar comments to CZ about winter conditions.
For example, Ripple’s CEO, Brad Garlinghouse, said that there were over 19,000 currencies in the market, which was far too many to create a healthy setting. He made this comment in early June 2022, saying that winter conditions would shake off the projects that do not add real value to the market. When winter is over, the market will therefore be left with projects that provide solutions to real problems.
Around the same time, FTX USA President Brett Harrison, Polygon CEO Mihailo Bjelic and Circle CEO Jeremy Allaire agreed with Garlinghouse.
Traditional investor billionaire Mark Cuban made similar comments about winter conditions in crypto on June 16. Referring to the market hype just before winter hit, Cuba said it wouldn’t matter if it was in stocks or crypto; any business achieved without a solid business plan would disappear. He said:
“As [Warren] Buffett says, “When the tide goes out, you’ll see who’s swimming naked.”
On a separate occasion, Blockworks’ co-founder Jason Yanowitz posted a thread on his Twitter account explaining the stages of the bear market. His thread mentioned a stage of “lifelessness” before markets rebounded. He said the third phase makes people want to leave the square. Those who stay despite the stagnant environment will lead to true innovation and be the real winners of crypto.
