Zhao: For the mass consumers, the first thing I would want them to understand is that everything is volatile. Q: Why are crypto prices so volatile, shooting up and down so fast? As long as people understand what they’re holding, what the risks are, then that’s OK. What’s important is there are high fluctuations. For Jeff Bezos, he would probably disagree. Did it go through a bubble? According to most laymen’s definition, it probably did. Amazon dropped (more than 90% from the start of 2000 into September 2001), and now they are one of the most valuable companies in the world. If an asset’s price drops more than 80%? Bitcoin dropped more than that and then recovered. There’s no clear definition of what a bubble is. Q: When people buy things only because the next person will buy it, isn’t that a sign of a bubble? So it’s not up to me to judge it.Īs a platform, we want to provide a marketplace for all the relatively valuable cryptocurrencies in the world.
Once you have liquidity, a thing has value, according to the neutral market. Wall Street banks have largely shied away from cryptocurrencies.įor something to have liquidity, you need a large number of people to want to buy it or sell it. Goldman Sachs Group Inc. is close to offering investment vehicles for Bitcoin and other digital assets to clients of its private wealth management unit. Q: What’s your takeaway when cryptos that started as a joke are soaring in value? This conversation has been edited for clarity and length. Besides bubbles and meme coins, he talked about which cryptocurrencies he owns and his promise to donate most of his wealth. Zhao spoke with The Associated Press after his company issued a call for more regulation of crypto markets around the world. Such fast growth is drawing in more investors, as well as gaining the attention of regulators around the world. Led by Bitcoin, cryptocurrencies have swelled in value to more than $2.6 trillion, putting them on par with the world’s most valuable stock, Microsoft. But Changpeng Zhao, who goes by “CZ,” does say that it shows the power of decentralization, which has underpinned the huge growth for crypto. He also doesn’t want to say if the exuberance for meme coins like Dogecoin is an indication of a dangerous bubble. The CEO of Binance, the world’s largest cryptocurrency exchange, doesn’t try to explain why some cryptocurrencies that started purely as a joke have surged so much in price.
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