The chief executive of leading crypto exchange Binance is explaining why the recent market crash bodes well for the long-term health of the digital asset markets.
In a new CNBC interview, Binance CEO Changpeng Zhao says that the crypto market crash was brought about by the abrupt influx of speculators in the space.
“I think a little bit of a reset is healthy to be very frank. Crypto attracted a number of non-believers into the space. They’re just speculators most likely, and that shouldn’t really happen on a large scale. When that happens on a large scale, that means the market is overheated and after a while, of course there will be a correction.
Usually, markets overswing on both ways. So, the crypto markets should only attract the believers, should only attract the people who are in it for the technology, who understand how to use it, etcetera.”
According to the Binance chief, the flushing of weak hands triggered by the Terra/LUNA collapse is advantageous for the long-term prospects of the industry as those who stayed are likely to contribute to the overall growth of the crypto ecosystem.
“I think corrections are actually healthy. But given the Terra/LUNA crash, it does hurt a lot of people but then you also weed out a lot of the weak players in the industry. I actually think now the industry is much healthier than it was six months [or] nine months ago when Bitcoin was [at] $68,000. Now, we see people who are building applications are staying in the industry. The investors in the industry now have a long-term view. I actually think the industry is much healthier now than when it was [trading] at all-time high.”
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Featured Image: Shutterstock/DomCritelli/Natalia Siiatovskaia
Source: https://dailyhodl.com/2022/07/31/binance-ceo-changpeng-zhao-highlights-need-for-market-reset-says-crypto-should-only-attract-believers/