Traditional Finance Will Undergo Empirical Effects

• The fall of certain crypto projects in 2022 has prompted the TradeFi players to take a step back from crypto adoption.
• CZ recently anticipated that the FTX collapse would have a great impact on the crypto market.

Changpeng Zhao (CZ), the CEO of Binance, the world’s largest cryptocurrency exchange, has raised new expectations regarding traditional finance. According to the latest tweet thread from CZ, the centralized financing system is expected to have catastrophic consequences. Zhao’s new forecast came after the TradeFi institutions reduced their commitments to cryptocurrencies in response to the massive downfall of the crypto domain in 2022.

CZ further tweeted that the failure of certain cryptocurrency projects during the previous year has posed a challenge for traditional financial players to adopt the crypto technology. These occurrences will put TradeFi behind the adoption curve, which could have existential consequences for them in 10–20 years, as per Zhao. 

Changpeng Zhao and His Allegations

During the past few years, cryptocurrency has advanced more rapidly than decentralized finance in a limited amount of time. Simultaneously, the traditional financial sector even embraced crypto technology due to its enormous popularity among new investors. However, in 2022, the industry witnessed the bankruptcy of some of the leading platforms, such as Terra Labs, Voyager Digital, Celsius Network, Alameda Research, and FTX. The market also experienced a series of crypto hacks in the previous year. 

The incidents have resulted in a withdrawal of investors from the crypto sector and new regulatory procedures from the centralized authorities. Correspondingly, it also caused the conventional finance industry to take a step back from cryptocurrencies and put a pause on its future adoption processes. 

Changpeng Zhao has recently made predictions in the wake of the demise of major cryptocurrency platforms. In November, CZ anticipated that the collapse of FTX would have an impact on the crypto market globally. The crypto industry has witnessed a significant fall in 2022; however, in the current year, the market has started to recover from the “impacts” and is currently experiencing a bullish outlook.