Binance CEO and Co-Founder, Changpeng Zhao (CZ), recently shared his thoughts on the crypto and stock markets. According to Forbes, CZ is worth about $17.4 billion as of the 30th of July. He made his recent views known during an interview with CNBC’s Carl Quintanilla on “Squawk on the Street.”
The $20,000 Psychological Barrier
Quintanilla asked CZ why Bitcoin’s support level seem to be $20,000. CZ responded that no one really knows why. He, however, noted that the asset peaked at about $20,000 in 2017 and it has been above and below it over the years.
CZ said that is probably why there is a little psychological barrier around the level.
On the issue of what the next catalyst for Bitcoin’s next move might be, the Binance CEO said he doesn’t think anybody can accurately forecast that. In the same manner that no one DeFi, NFTs, etc. were the drivers of the last bullish run. Before those, it was ICOs in 2017 and nobody could predict their movements before they happened.
We went by saying there are a lot of applications in the space and all of them are going in the right direction. The regulatory space is also turning out to be favorable as most countries are regulating rather than banning. So, the macro economy is driving crypto adoption, he said.
CZ then got questioned on if the US goes into a recession, how would the crypto sector then evade being punished? He responded by saying that the crypto market should move in an opposite direction from the stock market. Theoretically, both markets should have a negative correlation.
Crisis Response and US Regulations
The reality, however, is that the crypto market is small such that when stocks crash, people prefer to hold cash. Coincidentally, most of those who trade crypto also trade stocks. So, as it is, both markets have a positive correlation and it is not logical, he said.
About the crypto sector’s position on the US regulatory situation, CZ also made a statement. He said the fight among different regulators to have jurisdiction over the sector is good in a certain way. But it has the potential of creating other problems in other ways.
CZ said the issue with the US is not yet clear as most other countries do not have the same problem. The question of whom the crypto sector regulator comes clearly and it is usually the central bank. Some other countries could make it the securities regulator or a completely new regulator.
So other countries are working on finalizing their frameworks which is good. The US is a unique case where many regulators exist and who controls the space is currently not clear. The recent rally in the crypto market is a welcome development that might put the market back on track.