Cryptocurrencies have seen enough volatility during their time in the limelight that critics still dismiss the new financial tool as a bubble due to burst at any minute. According to crypto exchange Binance’s Chief Executive Officer Changpeng Zhao, though, that volatility is the appeal for top investors.
Recall the recent surge in the value of so-called meme stocks, or cryptocurrencies such as Dogecoin and Shiba, which began as memes. Though abrupt rises in value may fall just as quickly with the fickleness of any fad, Zhao says, these shifts illustrate “the power of decentralization” in real time.
“For something to be valuable, you only need one other person to want to buy it. For something to have liquidity, you need a large number of people to want to buy it or sell it,” said Zhao. That liquidity creates a space for firms like Binance, and for daring investors around the world.
Furthermore, Zhao argues, as the world grows increasingly hungry for crypto, the industry can and should step in to account for this high degree of volatility. Binance recently advocated for heightened regulation of crypto markets, hoping that government engagement in the decentralized currencies can help assuage fears and allow crypto to become safer and more accessible.