Binance CEO Changpeng Zhao says Bitcoin, Ethereum and the rest of crypto should be decoupled from stocks – here’s why
Binance CEO Changpeng Zhao says that the limited supply of cryptocurrencies, especially large assets like Bitcoin (BTC), Ethereum (ETH) and Binance Coin (GDP) may soon break from their correlation with the stock market.
In a new interview on CNBC, Zhao says that unlike fiat, the amount of digital assets that can go into circulation is limited.
“I think we are one year back from the previous all-time high. The inflation, the interest rate, the adjustments, etc., these all affect the markets, but they are short-term.
I think in the longer term, given how much money was printed over COVID in the last couple of years, and the amount of quantitative easing that was done, inflation would definitely come in just by simple logic.
Cryptocurrencies, the big ones – Bitcoin, BNB coins, Ethereum, they are limited, so their supply did not increase. The number of people entering this industry and the utility, the number of people who need to use these coins has increased. Demand has increased, but today, unfortunately.
Zhao says he expected a disconnect between crypto and stocks, but a correlation in market conditions emerged because people invest in both stocks and digital assets.
“In theory, if we go by supply and demand, there is a very simple logic to derive from it, but today many people who trade in cryptocurrencies are also in the stock market, so when the stock market tanks, people want money and they also sell cryptocurrencies . So today, on that short time frame, it’s kind of connected, but in theory they should be disconnected.”
Looking at Ethereum’s successful merger into proof-of-stake, Zhao says those in the space should manage their expectations since the expected changes won’t take effect right away.
– Many have very high short-term expectations for the merger. They believe Ethereum gas fees will drop from $10 per transaction to $0.02 overnight. That is most likely not going to happen. It is a long process. The Ethereum upgrade takes several stages over several months or years.”
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