Binance CEO Changpeng Zhao said that the recent crash of FTX, while forcing destructive effects and unexpected changes, will bring the industry into a much better place in the long run.
“This incident will set us back a bit, but then the industry will become healthier. So it’s actually better in the long run,” Changpeng Zhao said in an interview with CNBC.
The world’s top billionaire believes that the circumstances will improve in the future, highlighting the crypto market has massive potential for growth and this rocky scene will pass once the dust settles.
Look Out Below
Unlike a house of cards, the crypto market is built on solid technological foundations, which “are much better than the tools we had to transact, to raise money, to do global payments, etc. They are fundamental technologies that are much better than the tools we had before,” according to CZ.
Binance’s leader is, on the other hand, cautious about Bitcoin’s price, saying that it’s unpredictable when it comes to Bitcoin’s price movements.
The industry will grow over the next five or ten years. It’s not just about the coins, it’s the technology that comes out of the top, and, “we’re early in the industry,” CZ concluded.
Jean-Marie Mognetti, CEO of CoinShares, shared the same point of view. Mognetti previously said that the industry has to keep the game going and growing but the incident is certainly a step backward.
Binance is one of the most influential companies in the finance market. Binance is the largest digital currency exchange in terms of the trading volume.
However, the top position also brought more scrutiny to the company’s leadership, especially when the role of Binance in FTX’s downfall was placed in doubt of conspiracy.
Here Comes the Government
More legislative attention has since been drawn to the company after it withdrew FTX’s acquisition deal. The US House of Representatives reportedly asked for clarification of Binance’s role in the collapse of FTX.
In the latest statement, Senator Ted Cruz said that Binance has shown bad intentions in the move to publicly announce the potential purchase of the troubled exchange but quickly canceled the offer.
Binance is not the only entity to endure the pressure. The collapse of a series of crypto giants has shaken the entire market to the very core. Investors have grown doubtful of the future of crypto.
The event occurred just a few months after the crash of Luna and USDT, which gave the market insufficient time to recover. A handful of prominent names such as Celsius, Voyager, and Three Arrows Capital defaulted and now FTX filed for bankruptcy.
Bitcoin, the largest digital currency in the market, fell drastically from its November peak of nearly $69,000 to a quarter of its value while cryptocurrencies plummeted.
Market participants are questioning digital currency’s viability as key players gradually disappear from the market. And in the period when the interest rates continue to hike, investors choose safety over promises and flee risky investments such as cryptocurrencies.
Unlike traditional finance, cryptocurrency entities operate in a gray zone and are less likely to be protected. Customers’ deposits on crypto-lending platforms will not be backed by the government.
Analysts say the problem with FTX could cause exchanges to be more tightly controlled by the government in the future.
Slammin The Markets
Confidence was shaken by the failure of cult heroes in the sector. After the incident with Do Kwon in May, Sam Bankman-Fried was considered a knight of the cryptocurrency market when he came out to rescue brokers on the brink of bankruptcy.
But his company’s rotten foundation was bound to be out of control.
In the wake of the market depression, there are still investors and entities who put their faith in cryptocurrencies. Apart from CZ, Michael Saylor said he would continue to buy Bitcoin when the opportunity arises.
JP Morgan executives also said in separate statements that they believe in the potential of crypto, outlining the incident would prompt regulators to speed up properly regulating the sector, thereby attracting more institutional adoptions.