Binance CEO urges crypto buyers to 'hold on' amid 'unpredictability'

Binance CEO urges crypto buyers to ‘hold on’ amid ‘unpredictability’

Binance CEO Changpeng “CZ” Zhao strongly advised cash-strapped and inexperienced investors to stay away from cryptocurrency trading amid extreme market volatility and unpredictability.

On November 14, Zhao led “Ask Me Anything” Twitter space hosted by Binance, the CEO suggested unsophisticated investors wait out the turbulent times instead of risking the money needed for living expenses:

“You shouldn’t invest in crypto if you’re using money you need for the next week or next month, you should only use discretionary money you don’t need for a long time, like maybe a few years.”

For those with cash in reserve, Zhao advised inexperienced investors and traders to think twice before deploying capital to the market in the near future:

“If you don’t know what’s going on, don’t guess what’s going to happen. It is very difficult to predict. We will therefore go through a period of high volatility and unpredictability.

“So unless you’re very experienced, very mature, very confident and can handle the risk, I would recommend most people stay on hold during this time,” he added.

The spike in market volatility comes as the FTX crisis has had a negative effect on the entire industry, particularly on a number of centralized exchanges which have had to temporarily suspend withdrawals.

But Zhao confirmed that no such problem exists at Binance. When asked why users should maintain trust in the exchange, he pointed to the company’s track record:

“We don’t have any loans. We have no debt. We don’t owe anyone money. We also did not grant loans outside of the platform. We therefore never take user assets and give them to a third party to manage and try to generate returns. »

Zhao confirmed that Binance experienced pullbacks following the collapse of FTX and several other events that led to a drop in community confidence for centralized exchanges.

He reiterated that even in the event that Binance collapsed, the platform would still not prevent its users from withdrawing their funds.

“If everyone withdraws their funds from the centralized exchange, we will simply shut down the centralized exchange. We have many other profitable businesses that we have,” he said.

Related: FX Outflows Reach All-Time Highs as Bitcoin Investors Self-Hold

Zhao thinks such an event is also entirely possible, saying that once decentralized finance (DeFi) applications become mainstream, centralized exchanges may no longer be necessary:

“If we can have a way to make it safe and easy for people to keep their own assets that 99% of the general population can do it, centralized exchanges won’t exist or probably won’t need to exist. , which is great.”

While the Binance exchange itself is centralized, Zhao pointed out that the company’s investment partners include both centralized exchanges and decentralized protocols to provide users with choices and help entrepreneurs build.

“We are independent of technology. We are not trying to centralize everything. We are not trying to get everyone on the centralized exchange. If you are good enough to use a decentralized exchange, go for it.