Binance CEO CZ hosted an AMA session to answer community queries regarding FTX vulnerability.
Binance's CEO noted that the market is highly unpredictable in current circumstances.
CZ suggested that people invest in cryptocurrency if they are utilizing funds that they would not need for a long time.
Inexperienced and cash-strapped investors to avoid trading cryptocurrencies in the face of high market volatility and unpredictability.
On a Nov. 14 Zhao-led "Ask Me Anything" Twitter space hosted by Binance, the CEO advised inexperienced investors to wait throughout the volatile period rather than risking money needed for living expenses:
“If you need money next week or next month, don't invest in cryptocurrency; instead, utilize discretionary funds that you won't need for a long time, such as a couple of years.”
Zhao encouraged inexperienced investors and traders who do have excess cash to think twice before investing capital into the market in the near future:
“Don't try to predict what will happen if you don't know what's going on. It's quite difficult to forecast. As a result, we will see tremendous volatility and unpredictability.”
So, unless you're very seasoned, mature, confident, and can manage the risk, I would advise most individuals to simply hold for this period of time, he added.
The increase in market volatility comes as a result of the FTX situation, which has had a severe impact on the entire industry, notably a number of centralized exchanges that have been forced to cease withdrawals temporarily.
However, Zhao verified that no such problems exist at Binance. When asked why users should believe the exchange, he pointed to the company's balance sheet:
“We do not have any loans. We are not in debt. We owe no money to anyone. We also did not make loans using the platform. As a result, we never entrust user assets to a third party to administer and try to make yields.”
Zhao said that Binance experienced withdrawals as a result of the FTX collapse and other events that eroded community faith in centralized exchanges.
He reiterated that even if Binance went bankrupt, the company would not prevent its users from withdrawing their assets.
“We'll just shut down the centralized exchange if everyone withdraws their funds. We have a lot of other profitable enterprises,” he remarked.
Zhao believes such an occurrence is entirely possible, noting that once decentralized finance (DeFi) services become commonplace, centralized exchanges may become obsolete:
“If we can develop a way to allow people to securely and easily store their own assets in their own custody, which 99% of the general public can do, centralized exchanges will be obsolete or unnecessary, which is excellent.”
While the Binance exchange is centralized, Zhao noted that the company's investment partners include both centralized exchanges and decentralized protocols in order to provide customers with options and help entrepreneurs in their efforts to build.
“We are unconcerned about technology. We aren't attempting to centralize everything. We are not attempting to bring everyone on board the centralized exchange. Go for it if you're skilled enough to use a decentralized exchange.”
What do you think about Binance CEO CZ's views regarding this matter? Share your thoughts in the comment section below.
