CEO of crypto exchange giant Binance Chaopeng Zao (CZ) gave an interview to CNBC where he argued that the market is much healthier in the current winter conditions as only crypto-believers remain on the ground.
He said:
“A bit of resetting is healthy, to be frank. […] crypto has attracted a number of unbelievers to the space. They were just speculators, most likely.
In November 2021, the crypto market capitalization had reached an all-time high of $3 trillion, while Bitcoin had seen up to $69,000. After the devastation of the the coldest winter so far, the crypto market barely regained $1 trillion in market capitalization as Bitcoin approached $24,000 on July 28.
CZ added:
“I actually think now the industry is much healthier than it was with Bitcoin at $68,000.”
Market cleaning
CZ mentioned the Earth crash which led to a domino-like collapse in the sphere, sweeping away giants like 3AC and Celsius down with himself. However, CZ approached failure with a long-term perspective and said such reversals cleanse the market of non-believers.
He explained that when Bitcoin was trading at around $68,000, many non-believers entered the large-scale space to seek quick gains. He said:
“[Speculators entering the market] should not happen on a large scale. When this happens on a large scale, it means the market is over, [high] hot. And after a while, of course, there will be a correction.
According to CZ, the crypto market should only appeal to tech-savvy people. While the bear market is rattling non-believers, CZ said, the market is much healthier. People who know the value and understand how to use technology can enter the space to innovate now.
The big names agree
Ever since the Terra disaster tipped the market over the cliff, prominent crypto executives have been manufacturing similar comments to CZ about winter conditions.
For example, the CEO of Ripple, Brad Garlinghouse, said there were more than 19,000 currencies in the market, which was far too many to create a healthy environment. He made the comment in early June 2022 and said winter conditions will shake up projects that don’t offer real value to the market. Therefore, once the winter is over, the market will be left with projects that provide solutions to real problems.
around the same time, FTX The American President Brett Harrison, Polygon CEO Mihailo Bjelic and Circle CEO Jeremy Allaire agree with Garlinghouse.
Billionaire traditional investor Mark Cuban did the same comments on winter conditions in crypto on June 16. Cuba referenced market hype just before winter hit and said it wouldn’t matter if it was stocks or crypto; any business won without a solid business plan would disappear. He said:
“As [Warren] Buffett says, “When the tide goes out, you can see who’s swimming naked.”
On another occasion, the co-founder of Blockworks Jason Yanowitz posted a thread on his Twitter account explaining the stages of the bear market. His thread mentioned a stage of “lifeless” before the markets resume. He said the third stage makes people want to leave space. Those who stick around despite the stagnant environment will drive true innovation and be the real winners in crypto.