Changpeng Zhao urges digital asset investors to diversify amid falling market

2 min readMay 23, 2022

Binance CEO, Changpeng Zhao, is sure that against the backdrop of a falling market, it is impractical to invest in one or two cryptocoins, it is better to diversify your assets. However, the entrepreneur admitted that he himself does not adhere to such a strategy.

“In terms of investment, I am not a good example. I don’t diversify. My portfolio is represented by Binance, all in BNB and BTC. I use the Binance Card everywhere I go,” Zhao said.

Also, in response to questions from Reddit users about why Binance resumed trading with the LUNA token, the entrepreneur stated that operations were stopped due to the network being stopped by validators. Zhao pointed out that it was the actions of the platform that forced the validators to resume work.

“No one is forcing anyone to buy just because the auction is going on. There are buyers with a high tolerance for risk,” said the businessman.

We would like to remind the readers that earlier the Terra blockchain demonstrated a crushing fall after its UST coin lost its peg to the US dollar. Then there was a sharp decline in the rate of the top 10 LUNA cryptocoin, which is part of the Terra ecosystem. It fell from about $80 to $0.0001 within a few days.

The incident caused unrest throughout the crypto industry as retail and corporate investors suffered severe losses. The damage was estimated at about $40 billion.

But Galaxy Digital CEO Mike Novogratz believes that due to the Fed’s policy and the “bearish trend”, altcoins can lose more than 50% of their price. The entrepreneur pointed out that altcoins are “already down more than 80% from their highs,” but “the market is expecting another 70% drop.”

“The problem with risk modeling is that all the examples of stress over the past three decades that have led to a minimum have occurred in the context of Federal Reserve policy easing. We are still in the early stages of the tightening cycle. This means that you need to trust less traditional models and even intuition,” said the billionaire.

What do you think about it?