Binance CEO Changpeng Zhao advised people to invest in cryptocurrency if they have “cash that you won’t need for a long time,” as the market is volatile due to FTX’s demise.
Due to severe market volatility and unpredictability, Binance CEO Changpeng “CZ” Zhao has strongly warned cash-strapped and novice investors to refrain from trading cryptocurrencies.
On a Twitter chat hosted by Binance and led by Zhao on November 14 and called “Ask Me Anything,” the CEO suggested that inexperienced investors wait out the turbulent time instead of risking money they need for living costs:
You should not invest in crypto if you’re using money that you need for next week or next month, you should only be using discretionary cash that you don’t need for a long time, like maybe a couple of years.
~ Binance CEO
Zhao advised inexperienced investors and traders who do have spare cash to think twice before deploying capital into the market soon:
“If you don’t know what’s going on, don’t try to guess what’s going to happen. It’s very hard to predict. So we will go through a period of high volatility and unpredictableness.”
~ Binance CEO
The FTX situation has had a significant impact on the entire business, particularly on a number of centrally-controlled exchanges that have been forced to temporarily cease withdrawals.
However, Zhao affirmed that such problems do not exist at Binance. When asked why users should trust the exchange, he pointed to the company’s balance sheet.
He said again that even if Binance went out of business, its users would still be able to get their money from the platform.
We don’t have loans. We don’t have debt. We don’t owe anybody any money. We also did not give loans out of the platform. So we never take user assets and give it to a third party to manage and try to make yields.
Zhao also thinks that this is a genuine possibility. He says that central exchanges might not be necessary once decentralized finance (Defi) applications become popular.
Even though the Binance exchange is centralized, Zhao pointed out that the company’s investment partners include centralized and decentralized exchanges and protocols to give users options and help entrepreneurs build.
“We are technology neutral.” We have no intention of centralizing things. We have no purpose in bringing everyone into the centralized exchange. “If you are competent enough to use a decentralized exchange, by all means, do so.”
