In a recent interview, Changpeng Zhao, the CEO and Co-founder of Binance spoke about trans fee mining business model, cryptocurrency exchanges pumping fake volume and when he expected the next major bullish run in the cryptocurrency market.
Further, Zhao was asked about Trans fee mining and how it could affect the cryptocurrency ecosystem. Changpeng opined that the trans fee mining business model was very damaging and most of the exchanges who had adopted this model had seen a significant decline in their trading volume. Furthermore, it was a very complicated way to raise funds. According to him, the law of demand and supply shows that issuing many platform tokens would surely result in the prices going down.
Changpeng was also asked about the increasing demand for stable coins like Circle USDC and Gemini dollar. How these coins were affecting the cryptocurrency market. According to CZ, stablecoins were very important and a majority of the people did not understand its potential. He further added that one positive aspect of stablecoins was that they would introduce fiat money into the cryptocurrency space.
Another topic of discussion was regarding the fake volumes shown by exchanges. Changpeng stated that wash trading was a process where one trader buys from another trader and then sells back to the first trader. Exchanges do the same to increase their trade volume. He added that it is very difficult to stop this problem and complex mechanisms had to be adopted to prevent it.
The interview covered another important aspect which was about the next bull market and when it would return. According to CZ, analyzing markets was not something he would do because any predictions made by him would either be scrutinized or people would take his advice to buy and sell. He stated:
“As an exchange operator, I kind of influence price, but if you look at the chart, what is very clear right now is that we have seen a very strong $6000 support in 2018, whereas in 2015, the support level was $200”
He further added that they were not in a bear market and the bull market could return anytime. Furthermore, historical data showed that October to December was usually when markets go up. He further stated,
“but I am not saying that it will this year, or that it will not. I don’t make predictions. I just react”