Binance CEO Changpeng Zhao spoke at a recent conference in Indonesia. The CEO talked about the current situation in the market. He drew parallels between the current chaos and the 2008 financial crisis. Here are the CEO’s statements…
Binance CEO comments on crypto crisis
Changpeng Zhao, CEO of Binance, the largest cryptocurrency exchange by trading volume, talked about the current chaos in the market. He made an analogy between the ongoing crypto turmoil and the 2008 financial crisis. Zhao thinks the industry will have to deal with the cascading effects of the FTX collapse. He also believes that several crypto projects may find themselves in a serious stalemate. He thinks it may take a few weeks for this to show up.
cryptocoin.com As we have also reported, some are looking at the collapse of crypto projects such as Galaxy Digital, Solana, Voyager as a possible with the bankruptcy of FTX. These projects had received investment from FTX. FTX filed for Chapter 11 bankruptcy yesterday after failing to file a bailout.
2008, Lehman Brothers and FTX…
FTX, once the largest trading platform, is now compared to investment bank Lehman Brothers, whose dramatic death has become synonymous with the 2008 financial crisis. Lehman was apparently too big to fail. But Lehman’s collapse was caused by the subprime mortgage crisis. Former BitMEX CEO Arthur Hayes recently warned that the broader crypto market will fall victim to this collapse.
Hayes also noted that it took several months for the stock market to bottom out after the Lehman disaster. So this shows that crypto is not going to recover quickly. The collapse of the second largest cryptocurrency exchange is thought to attract unprecedented regulatory scrutiny. Meanwhile, it is expected to drive crypto investors away from the crypto space. Zhao believes that the cryptocurrency industry will eventually recover. However, he did not specify how long this might take.
Changpeng Zhao said to “avoid” these
On the other hand, the CEO gave a recommendation to the users. Posting on his Twitter account, Zhao stated that certain projects should be avoided. Among the projects that Zhao points out to be avoided are platforms that are “unprofitable, survive by selling their own coins, promising high returns when you lock your tokens.” He also argues that projects with high total supply but low circulating supply should be approached with caution. Finally, the CEO says that crypto money companies that are involved in loans should be avoided.
FTX aside, avoid businesses/exchanges/projects that:
– are not profitable (musical chairs)
– survive by selling their own tokens
– give high incentives for locking your tokens
– have a large total supply, but only a small circulation supply
– involves loansStay #SAFU 🙏
— CZ 🔶 Binance (@cz_binance) November 11, 2022
