Even as the excitement and hype for crypto continues unabated, the market has been significantly less explosive in 2018 than most outsiders would like to believe. After reaching the stratosphere with a near $20,000 valuation in December 2017, bitcoin is trading nearly 67% below all-time highs and has struggled for months to break through key resistance above $6,500. Nevertheless, some insiders see an opportunity for the market to bounce back after months of surprisingly little movement.
Such is the case with Binance CEO Changpeng Zhao, who views an impending bull market on the horizon. Moreover, the continued migration of crypto into the mainstream consciousness should offer an additional push.
I had the opportunity to chat with Mr. Zhao about the market’s prospects over the near-term, as well as the explosive growth and future potential of his booming cryptocurrency exchange, Binance.
How did you make Binance the largest exchange on the market? What’s the secret sauce?
We launched Binance only about 16 months ago and so many people think we must have some “secret sauce”. But the reality is that we had already been working on trading engines for a decade before starting Binance, so we had a pretty good idea what the underlying technology would look like. Our community is also very unique and engaged. We acquired some of our most engaged users during our ICO; friends of mine who purchased tokens during the sale still have their holdings to this day.
Earlier this month you predicted that crypto would resume its bull market. What are you basing your forecast on?
I prefer not to comment on this specifically, but if you look at the crypto market’s history, November and December tend to be very active periods. It happened in 2017, and a little bit in 2016. Even if you go back to 2012 and 2013, the same pattern bears out. The phenomenon also extends to traditional asset markets—October, November, and December tend to be peak activity months. Even so, I’d rather avoid any definitive statements; I’m not trying to predict the future.
You recently announced that Binance will be donating all coin listing fees to charity. What was the rationale behind this decision?
Charity is one of those areas where everyone should help out if they can. We are just doing our part to contribute. Our review process won’t change much at its core; our listings team will continue to maintain a high standard of evaluation for projects that apply to be listed. Projects can propose a donation amount they are comfortable with, but there are many other factors that go into the listing review process. I think our acceptance rate is about three percent, so it is still harder to get a coin listed on Binance than get accepted into Harvard!
Why haven’t we seen an influx of institutional money into crypto?
I think it’s starting to happen. We are already seeing much higher participation from institutional funds, especially in countries like Singapore and the European Union. It’s a good thing in general. More so in developed countries, there is a great deal of money being managed by institutions. The fact that these funds are migrating their funds into crypto is a sign that the market’s capitalization is about to get much bigger. As the market cap expands and more institutional actors participate, the sector will stabilize and lead to better adoption. I think this is all very positive, and it’s guaranteed to happen. Now it’s just a matter of time.
What momentous events do you see on the horizon that could be enormous catalysts for the crypto industry?
The biggest event I see is increased crypto adoption. We are already seeing more real-world use cases for tokens like BNB. You can now use the BNB token to buy coffee, book flights, or even purchase a home. As the use cases continue to develop, the industry will see wider adoption and continue expanding. Another big change I see coming to the industry is its introduction to the charity space. We recently launched a blockchain donation portal to solve the lack of transparency issues charities face today. I believe that if we make charity 100% transparent with blockchain, we can increase how much people will donate to charities by ten or even one hundred times. Donors will be able to see where their funds are going, and charities will be held accountable to make sure donations reach their intended beneficiaries. Blockchain can be a strong force for social good and can be instrumental in achieving all 17 sustainable development goals.
How do you plan to maintain your market share (especially after deciding to donate your listing fees to charity)?
We plan on continuing to provide more key infrastructure services for the industry. We already have our core exchange and recently acquired a terrific service in Trust Wallet earlier this year. We want to continue exploring the wallet space, so we’re looking for different products for unique markets, such as hardware and institutional wallets. We also have Labs, our investment arm which focuses on finding top blockchain projects and teams, and our Academy which provides education and information. We’re also going to keep building our Charity Foundation to make a bigger impact in the social responsibility arena.
On top of that, our fiat-crypto exchange in Uganda went live a few weeks ago, and we’re planning on launching fiat exchanges across every continent. We are also building our own decentralized exchange, Binance Chain. So, we have a lot of exciting developments in the works. Like I said, we’re trying to be the main infrastructure services provider for the blockchain industry.
Are you planning on opening new offices across the globe?
Absolutely. Binance is already a global company—our team is distributed over 39 countries and unique regions. Our plan is to continue building the team and our community in different markets, and along with our new fiat-crypto exchanges launching in every continent, we’re forming local teams in every region. We are trying to recruit teams that share our vision, have a long-term perspective, and are seeking to make blockchain stronger.