Binance CEO Changpeng Zhao: Cryptocurrencies from central banks are pointless - - Financial Market Media No. 1 in the World Binance CEO Changpeng Zhao: Cryptocurrencies from central banks are pointless Binance CEO Changpeng Zhao: Cryptocurrencies from central banks are pointless

May 10, 2021

Binance CEO Changpeng Zhao: Cryptocurrencies from central banks are pointless

 The correction scenario for bitcoin has not resumed its implementation. Despite the fact that the fundamental background of recent weeks was not the most favorable for bitcoin, the first cryptocurrency in the world still found the strength to resume its movement to the north. Traders and everyone who deals with cryptocurrencies should be reminded that there are much more factors that affect or may affect the bitcoin exchange rate in 2021. For example, in the last few months, the so-called "altcoin season" has begun. This is the name given to the sale process by some bitcoin market participants and the purchase of other cryptocurrencies with these funds, which are not yet so popular and have a greater growth potential than bitcoin. Thus, if bitcoin fails to update its highs of value for almost a month, while Ethereum continues to update them almost every day, this suggests that the demand for bitcoin is beginning to decline.

Judging by the charts, investors are not getting rid of it en masse, this only about reducing demand. But since the influx of new investors and investments is not observed, bitcoin itself can no longer show the same growth as in the last year. Also, it should not be forgotten that no asset can grow constantly. Even if a lot of institutional investors have come to bitcoin in the last year, this does not mean that it will continue to show growth. The institutions, rather, saved bitcoin from the collapse that was in 2013 and 2017 and could have in 2021. However, it is the institutions that can keep bitcoin in their accounts for as long as they want, so there will probably be no mass sales of it. But this does not solve the problem of the influx of new investments, so that "digital gold" continues to grow. For everyone in the world, bitcoin is now an investment tool, not a cryptocurrency. Therefore, once it stops growing, it loses its appeal.

At the same time, discussions about the introduction of state-owned digital currencies by many central banks still do not subside. None of them is in a hurry to implement these projects. For example, the Fed and the ECB have repeatedly stated that they will not rush to create a digital dollar and a digital euro, as they "want to do everything right." The head of the Binance exchange, Changpeng Zhao, believes that state-owned digital currencies are unlikely to enjoy the same demand as ordinary tokens. CBDCs will differ from fiat money only in the form of their circulation. In fact, it will be the same as fiat money, since its issue will be controlled by central banks, can easily and in any volumes increase, can be used by central banks to regulate monetary policy, and will be subjected to inflation. According to Changpeng Zhao, these are the main properties that the majority of users are concerned about.

In technical terms, bitcoin bounced from the 61.8% Fibonacci level four times, but eventually still overcame this level. Thus, the chances of continued growth have increased slightly. At the same time, it is absolutely possible that bitcoin will now be traded in a side channel or its likeness for some time.