The Binance CEO is optimistic that the cryptocurrency market will blossom again.
It is no longer news that the cryptocurrency market has been facing a major downward trend that has plunged the entire valuation of the cryptocurrency market below $1 trillion.
The recent cryptocurrency crash reminded many of the 2018 bear market, which started moments after the prices of digital currencies existing at the time soared to new highs.
CZ: Current Crypto Market Has More Leverage
Interestingly, Changpeng “CZ” Zhao, the CEO and founder of Binance, the world’s largest cryptocurrency exchange by 24-hour trade volume, has highlighted key differences why the 2018 bear market is different from the current one.
According to CZ, cryptocurrency now has more leverage compared to what was in existence in 2018. CZ noted that leverage is in two categories – fast and slow – adding that slow leverage is found when funds lend to different decentralized finance (DeFi) protocols, while fast leverage is mostly found on centralized exchanges, especially with futures products.
CZ said slow leverage is being taken out of the system, which is a major reason the entire crypto market is experiencing a domino effect.
“When one of these gets (Funds) liquidated, the affected lenders typically take a few days or weeks to realize or admit the pain. These can also have a cascading effect, but the propagation speed is much slower,” CZ said in a statement.
As a result of the ongoing cascading effect, CZ said some crypto-related projects are usually lucky as they get funded by “big fish,” whereas others do not get such support from these large corporations.
Allow Bad Crypto Projects to Fail – CZ
He noted that some projects are bad and are not supposed to be saved. In CZ’s words: “Don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will.”
Unfortunately, these projects have attracted many users through enticing promotions such as inflated incentives and creative marketing. While CZ asserted that the crypto market is yet to see “the end of these yet.”
“Sadly, some of these ‘bad’ projects have a large number of users, often acquired through inflated incentives, ‘creative’ marketing, or pure Ponzi schemes. Bailouts here don’t make sense. Let them fail. Let other better projects take their place, and they will.”
The Binance executive noted that these bad projects do not require “bailouts”; however, cryptocurrency projects that have good qualities and have made a few mistakes are the ones that need to be saved.
“With our position as one of the largest industry players with healthy cash reserves, we have a duty to protect users. We also have a responsibility to help industry players survive and hopefully thrive But: Not all bailouts are the same.”
Mike McGlone And CZ’s Opinion On BTC Price
CZ says that the current market value for Bitcoin is low although not an entirely bad price.
“In 2017, we thought 20K was crazy high. Today, we think 20K is painfully low. The industry is growing,”
Meanwhile, CZ’s views about the massive growth of the crypto market was echoed by Bloomberg’s senior analyst Mike McGlone, who noted that Bitcoin at $20,000 is now the new $5,000.
“$20,000 Bitcoin Maybe the New $5,000 – The fundamental case of early days for global Bitcoin adoption vs. diminishing supply may prevail as the price approaches typically too-cold levels,” McGlone said in a recent tweet.
At the moment, Bitcoin is still trading within the $20,000 range as investors continue to hope that the ongoing cryptocurrency winter will soon come to an end.
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Source: https://thecryptobasic.com/2022/06/24/binance-ceo-changpeng-zhao-identifies-key-difference-between-2018-bear-market-and-now/?utm_source=rss&utm_medium=rss&utm_campaign=binance-ceo-changpeng-zhao-identifies-key-difference-between-2018-bear-market-and-now