Changpeng Zhao explains why there is currently a positive correlation between stocks and cryptocurrencies

Binance Co-Founder and CEO Changpeng Zhao (popularly known as “CZ”) shared his thoughts on the cryptocurrency market.

CZ made his comments during an interview with Carl Quintanilla, co-host of the show “scream in the streetfrom the American channel CNBC.

When Carl Quintanilla asked why $20K seems to be the support level for bitcoin, CZ replied:

No one knows for sure, but the last peak in 2017 was around $20K, and it’s been below that for two years and been them above that. So I think that’s probably one of the reasons there’s a slight psychological barrier there.

Carl Quintanilla then asked what the catalyst is for bitcoin’s next major move, and CZ responded:

I don’t think one could predict very accurately, as no one really predicted NFTs, DeFi, etc, which probably drove the last bull run. before that, in 2017, it was mainly ICOs. Six months before these things happen, very few people can foresee it.

So for the next…there are so many more apps in the space, I don’t know which one, but I think all of these things are moving in the positive direction. The regulatory landscape is quite good – most countries have adopted regulatory frameworks; they don’t ban… cryptocurrencies. The macroeconomic situation… favors the adoption of… cryptocurrencies.

Someone then asked CZ if the US is in a pullback, and why the crypto market might avoid going into a deeper crisis, and he replied:

To be honest, logically, cryptocurrencies should be valued inversely to the stock market. In theory they should be negatively correlated, but today the cryptocurrency market is so small that every time the stock market crashes… people want to keep cash, and today most people who trade cryptocurrencies also trade stocks. So right now it’s positively correlated, which is illogical, but that’s just the way it is right now.

As for the crypto industry’s view of the regulatory climate in the US, here’s what CZ had to say:

So right now in the United States, it’s really interesting. We have multiple regulators fighting for jurisdiction over the industry, which is a good thing in one sense, but also causing other problems in different ways. It’s a bit fuzzy, but in most other countries, this problem does not exist. [Dans la plupart des autres pays, l’agence de régulation est assez claire, parfois [c’est] the central bank.

Occasionally, [il s’agit] of the securities market regulator. Sometimes it is a completely new regulator. So most regulators are trying to clarify the regulatory framework in their country, which is very positive… The United States is a bit unique in that it’s a big country with multiple regulators, and now, it is unclear who controls this space.

Leave a Comment