Binance CEO Changpeng Zhao Stresses Need for Market Reset, Says Crypto Should Only Attract Believers

The CEO of major crypto exchange Binance explains why the recent stock market crash bodes well for the long-term health of digital asset markets.

In a new CNBC interview, Binance CEO Changpeng Zhao said that the crypto market crash was caused by the sudden influx of speculators into the space.

“I think a bit of a reset is healthy to be very frank. Crypto has attracted a number of non-believers to the space. They’re probably just speculators, and it really shouldn’t happen on a large scale. When this happens on a large scale, it means that the market is overheated and after a while there will of course be a correction.

Usually the markets jump back and forth. So, crypto markets should only attract believers, should only attract people who participate in them for the technology, who understand how to use it, etc.

Binance chief says the rinsing of weak hands triggered by the Terra/LUNA collapse is beneficial to the industry’s long-term outlook as those left behind are likely to contribute to the overall growth of the crypto ecosystem .

“I think the corrections are actually healthy. But given the Terra/LUNA crash, it hurts a lot of people, but you also eliminate a lot of weak players in the industry. I actually think now the industry is much healthier than it was six months ago [or] nine months ago, when Bitcoin was [at] $68,000. Now we see that people who build apps are staying in the industry. Investors in the sector now have a long-term view. I actually think the industry is much healthier now than it was. [trading] at a record high.

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Featured Image: Shutterstock/DomCritelli/Natalia Siiatovskaia