Binance CEO Urges Crypto Buyers to ‘Hold’ Amid ‘Unpredictability’

Binance CEO Urges Crypto Buyers to 'Hold' Amid 'Unpredictability'

Binance CEO Changpeng “CZ” Zhao has strongly advised inexperienced cash-strapped investors to refrain from trading cryptocurrencies in the face of extreme market volatility and unpredictability.

On Nov. 14 on Twitter space led by Zhao “Ask me anything”: placed by Binance, the CEO suggested that inexperienced investors should wait out the turbulent period instead of risking the money they need to live:

“You should not invest in cryptocurrencies if you are using money that you need next week or next month, you should only use discretionary money that you do not need for a long time, like a couple of years.”

For those with cash to spare, Zhao advised inexperienced investors and traders to think twice before investing in the market in the near future:

“If you don’t know what’s going on, don’t try to guess what’s going to happen. This is very difficult to predict. So we will go through a period of high volatility and unpredictability.”

“So unless you’re very experienced, very mature, very confident and can’t handle risk, I would recommend that most people just hold the position for that period of time,” he added.

The surge in market volatility comes as the FTX crisis has had a negative impact on the entire industry, especially a number of centralized exchanges that have had to temporarily suspend withdrawals.

But Zhao confirmed that such problems do not exist in Binance. Asked why users should maintain trust in the exchange, he pointed to the company’s balance sheet:

“We don’t have loans. We have no debt. We don’t owe anyone money. We also did not give loans outside the platform. Therefore, we never take user assets and transfer them to a third party for management and profit.”

Zhao confirmed that Binance was facing withdrawals following the FTX crash and a number of other events that led to a drop in community confidence in centralized exchanges.

He reiterated that even if Binance collapsed, the platform would still not block user withdrawals.

“If everyone withdraws their funds from the centralized exchange, we will simply close the centralized exchange. We have many other profitable businesses that we have,” he said.

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Zhao believes such an event is entirely possible, stating that once decentralized finance (DeFi) applications become mainstream centralized exchanges, there may no longer be a need:

“If we have a way to allow people to safely and easily store their own assets, which 99% of the general population can do, there will be no centralized exchanges, or probably no need to exist, which is a big one.”

Although the Binance exchange itself is centralized, Zhao emphasized that the company’s investment partners include both centralized exchanges and decentralized protocols to provide users with choice and support entrepreneurs in development.

“We are technologically independent. We are not trying to centralize everything. We are not trying to bring everyone to a centralized exchange. If you are good enough to use a decentralized exchange, do it.”