The CEO of Binance, the world’s largest cryptocurrency exchange, does not try to explain why some cryptocurrencies, which started as a joke, have risen so high in prices. He also doesn’t want to say whether his enthusiasm for meme coins like Dogecoin, SHIB is indicative of a dangerous bubble. However, Changpeng Zhao, nicknamed “CZ,” says it shows the power of decentralization that drives massive growth for crypto. Here are some of Changpeng Zhao’s highlights from a recent interview…
Mentioned meme coins like CZ, DOGE, and SHIB
When asked about the rapid rise in value of meme coins like SHIB, CZ replied that he did not buy Dogecoin. However, he stated that the rise of these coins demonstrates the power of decentralization. “If enough people in the community value it because it’s cute, because they like the meme, then it has value,” he said. Pointing out that he now has a Shiba Inu, CZ said that for something to be valuable, “it only takes one person who wants to buy it” and said “it’s not my place to judge”.
“When people buy things just because the next person will get it, isn’t that a sign of a bubble?” When asked, Zhao replied, “To some extent, yes. But this is not a black and white thing,” he said, noting that there is no clear definition of what a bubble is. When asked about the volatility of crypto prices, he said, “The first thing I want mass consumers to understand is that everything is volatile,” he said.
You have to park your worth somewhere. It could be a house, it could be a stock, it could be US dollars. But all that fluctuates against something else. Crypto has high volatility as it is a relatively smaller market. It is much, much smaller than traditional assets. The larger the market value of an asset, the smaller the volatility. It’s just math.
So, is this volatility the biggest obstacle keeping people away from cryptos today? According to Zhao, most traders in this space for speculative trading and investing actually prefer volatility. According to him, the biggest factor hindering the growth of crypto is its difficulty of use. “Keeping your cryptocurrency safe today is pretty tough,” he says.
Where does Changpeng Zhao invest his money?
When asked where he invested his own money, CZ said that although he did not invest a lot, he bought some Bitcoin in 2014, spending a little over time but holding on to most of it. He mentioned that the other asset he owns, which makes up the majority of his net worth, is Binance Coin (BNB). He also stated that he has a reasonably sized stake in Binance. But in another project, he reiterated that he has no assets in crypto. He stated that he did this on purpose because he did not want any conflict of interest to arise.
“Crypto seems so divisive, people either fervently believe it or think it’s worthless. Will it always be an all-or-nothing thing?” To the question, Zhao replied, “This is bipolar thing for the past few years. There’s a small group of guys who are die-hard fans of crypto, and then there’s the majority of people who don’t even know what crypto is. But as more and more people get into crypto, we see the middle ground,” he replied, citing examples from NFTs:
I’m talking to many athletes who are looking at NFTs right now. Now they realize the value of that. They may not be a big fan of crypto, but they are no longer overly skeptical of crypto. Even the managers of central banks were very skeptical when I spoke to them a year ago. But now when I talk to them, they say, ‘We need this to grow our economy. But he still has concerns about certain aspects of crypto.
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