Binance chief executive Changpeng Zhao (CZ) urged new and inexperienced cryptocurrency investors on Monday to avoid trading amid the ongoing crypto crisis.
Zhao commented on a Binance ‘Ask Me Anything’ Twitter space that speculators and investors should not invest essential money needed for living expenses.
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He said at the time: “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.”
He added that those with little money to invest should reconsider investing their hard-earned money in the crypto industry in the near future.
He urged people not to “try to guess what’s going to happen” in crypto markets as they were “very hard to predict.”
He added: “[We] will go through a period of high volatility and unpredictableness. So unless you’re very experienced, very mature, very confident, and can handle the risk, I would recommend most people just hold for this period of time.”
FTX Collapse Hits Crypto Industry
FTX’s collapse sent ripples across the entire crypto industry already hit by the ongoing crisis, namely after the collapse of Terra/Luna, prompting several centralised exchanges to halt withdrawals.
When asked whether investors should trust the world’s largest exchange, Zhao stated: “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.”
Trust in the platform fell after users withdrew funds amid the FTX collapse, but he restated that his platform would never block users from pulling out their funds.
He explained further, stating: “If everybody withdraws their funds from the centralized exchange, we’ll just shut down the centralized exchange. We have many other profitable businesses that we have.”
He concluded that the rise of mainstream decentralised finance (DeFi) would eliminate centralised exchanges.
He explained to the audience: “If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to exist, which is great.”
