Binance Chief Executive Officer, Changpeng Zhao appeared in an interview with Bloomberg TV this Monday. Zhao argued that Bitcoin, the largest cryptocurrency by market capitalization, is likely less volatile than stock prices of similarly-sized companies by market capitalization such as Apple and Tesla.
“There’s always a large number of people having the herd mentality than the guys who actually do serious research.”@cz_binance, founder of the world’s largest cryptocurrency exchange Binance, discusses volatility of #cryptocurrency markets on @BloombergTV pic.twitter.com/UAT4Kpy1tu
— Bloomberg (@business) May 3, 2021
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According to the Binance CEO, it are the yield chasers who are to blame for price fluctuations due to their large numbers. These yield chasers are not as committed to crypto as the actual true believers or ‘hodlers’, Zhao adds, stressing that those of little faith are only in it for the next “moon-shot gem.”
“There’s always a large number of people having the herd mentality than the guys who actually do serious research.”
“Whenever there is some negative news, they [herd followers] run away, whenever there’s positive news, they try to rush in and so they do cause more volatility,” Zhao noted.
Volatility is everywhere […] It is not unique to crypto.
Zhao can be considered one of the pack of “die-hard fans who understand and really love the project,” as he dubs them himself. He had previously suggested to hold almost all his net worth in cryptocurrencies and would effectively be all-in on crypto.
Bitcoin’s volatility has steadily been declining since the start of the year, according to data from Woodbull. However, Zhao might be a bit overly optimistic about current realities. Analysis from the investment research portal AlphaQuery shows that Tesla and Apple stock prices do much better in the last 60 days when it comes to volatility. That being said, Bitcoin is trending upwards in a more controlled way than it previously has. Perhaps the 5-10% should be considered as normal behavior.
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Source: Igaming
