Binance CEO CZ has called crypto investors “hodl” amid “unpredictability”. He said we will see higher volatility in the market for a while.
Binance CEO advises to stay away from the market amid uncertainty
Changpeng Zhao advises inexperienced traders to stay away from trading in an environment of extreme volatility and uncertainty. At a Twitter meeting hosted by Binance on Nov. 14, the CEO suggested that inexperienced investors wait rather than risk money specifically needed for living expenses:
If you’re using the money you need for the next week or next month, you shouldn’t invest in crypto, you should only use discretionary cash that you don’t need for a long time, maybe a few years.
Zhao advises small investors to think twice before deploying capital in the near future:
If you don’t know what’s going on, don’t try to predict what will happen. It is very difficult to guess. Therefore, we will go through a period of high volatility and unpredictability. So unless you are very experienced, very mature, very confident and can’t take the risk, I would advise most people to wait for this period.
The crisis in the market emerges with the FTX crisis
The recent decline comes as the FTX crisis has negatively impacted the entire industry, particularly some centralized exchanges that have had to temporarily halt withdrawals. However, Zhao confirmed that there is no such issue on Binance. When asked why users should trust the stock market, he pointed to the company’s balance sheet:
We have no credit. We don’t owe anyone. We also did not give credit outside the platform. That’s why we never give user assets to a third party to take and manage and try to generate returns.
As we reported as Kriptokoin.com, Binance shared that it holds 70 billion dollars in reserves.
Zhao also confirms that Binance faced massive withdrawal demand with the collapse of FTX. He reiterated that even if Binance crashes, the platform will not prevent its users from withdrawing their funds:
If everyone withdraws their money from the central exchange, we will close the central exchange. We have many more profitable businesses that we have.
CZ emphasizes that Binance is resilient to such a situation
Zhao noted that centralized exchanges may no longer be necessary as DeFi applications become mainstream. He said in his recent tweets that Binance-backed Trust Wallet fills this gap. CZ hopes they can cover all client funds even if Binance goes bankrupt:
If we can find a way to allow people to safely and easily hold their own funds in their custody, which 99% of the general population can do, there will be no centralized exchanges or possibly even need to exist.
While Binance is a centralized exchange, Zhao emphasized that the company’s investment partners include both centralized exchanges and decentralized protocols to provide users with options and support entrepreneurs to build:
We are tech agnostics. We are not trying to centralize everything. We are not trying to bring everyone to the centralized exchange. If you’re good enough to use a decentralized exchange, go for it.