Binance CEO Changpeng “CZ” Zhao reportedly urged cash-strapped and inexperienced investors to steer clear from trading crypto during extreme market turmoil and unpredictability.
Specifically, during a Nov. 14 Zhao-led Ask Me Anything Twitter space, hosted by Binance, the CEO shared a belief that unsophisticated investors should sit on the fence until the turbulent period dies out, rather than putting their fund for living expenses at risk.
“You should not invest in crypto if you’re using money that you need for next week or next month, you should only be using discretionary cash that you don’t need for a long time, like maybe a couple of years.”
For the ones who do have money saved up for investing, Zhao reportedly recommended that investors and traders with little experience to carefully contemplate their decisions prior to placing capital into the market in the near future.
“If you don’t know what’s going on, don’t try to guess what’s going to happen. It’s very hard to predict. So we will go through a period of high volatility and unpredictableness. So unless you’re very experienced, very mature, very confident, and can handle the risk, I would recommend most people just hold for this period of time”.
The surge in terms of market volatility reportedly surfaced when the FTX turmoil commenced, creating a negative impact across the entire sector – specifically several centralized exchanges that have had to temporarily cease withdrawals.
Nonetheless, Zhao shared a confirmation that no such problems are still visible at Binance. Upon the inquiry regarding the reason why users should maintain trust in the exchange, he mentioned the firm’s balance sheet.
“We don’t have loans. We don’t have debt. We don’t owe anybody any money. We also did not give loans out of the platform. So we never take user assets and give it to a third party to manage and try to make yields.”
Zhao confirmed Binance experienced withdrawals following the FTX collapse and several other events that led to a fall in community trust for centralized exchanges.