CoinDesk
Binance founder Changpeng "CZ" Zhao told CoinDesk there is no single cause for crypto's roughly 50% decline over the past year, pointing instead to a confluence of capital rotating into artificial intelligence, persistent geopolitical tension, and the typical four-year market cycle. Bitcoin, on which he said Binance's strength is closely tied, hit an all-time high above $126,000 last October and is down about 50% since.
CZ acknowledged that AI firms likely absorbed capital that might otherwise have flowed into crypto, but argued that rotation is a positive signal for the long term. He also endorsed the rapid growth of prediction markets as a price-discovery tool, calling the liquidity provided by speculators "good for the population," and said any financial instrument carries some speculative component.
Why it matters
The remarks land with unusual weight because CZ sits at the center of the world's largest crypto exchange and remains the public face of the Binance brand after his pardon. His read on the drawdown is deliberately multi-causal rather than structural: AI is draining marginal capital, geopolitics is keeping risk appetite compressed, and the four-year halving cycle is doing what it has done twice before. Framing the sell-off as cyclical rather than broken is itself a bid for confidence at a moment when several rival CEOs have been quieter about near-term outlooks.
Market impact
On policy, CZ said the U.S. Digital Asset Market Clarity Act may still pass by year-end once remaining issues, including a presidential ethics provision, are resolved. Even if it does not, he argued, the U.S. retains a regulatory lead through the GENIUS stablecoin law and copycat legislation abroad. He conceded that a Democratic resurgence in the November midterms could bring renewed scrutiny of Trump's pro-crypto actions, including the pardon CZ himself received, but added that anti-crypto lawmakers face electoral risk in a cycle where crypto holders are increasingly consequential voters.
Frequently asked questions
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Why does CZ think crypto is down about 50% over the past year?
He told CoinDesk there is no single cause. Capital rotating into AI, persistent geopolitical tension, and the typical four-year crypto cycle are all contributing, in his read, to a cyclical rather than structural drawdown.
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What did CZ say about the AI rotation eating into crypto capital?
CZ framed it as a long-term positive. AI firms absorbing speculative dollars builds a broader fintech base, he argued, even if it pulls marginal capital away from spot crypto in the near term.
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Does CZ expect the U.S. Clarity Act to pass this year?
He said it may become law by year-end if lawmakers resolve remaining issues, including a presidential ethics provision. Even if it does not, CZ argued the U.S. retains a regulatory lead through the GENIUS stablecoin law and copycat bills abroad.
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What did CZ say about prediction markets and speculation?
CZ called the speculation-driven liquidity in prediction markets "good for the population," arguing that more participants pricing the same questions improves price discovery. He acknowledged a gambling component but said that exists in other financial instruments too.
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How is CZ positioning himself ahead of the U.S. midterm elections?
CZ said he is staying out of U.S. political activity because foreign nationals are barred from direct involvement. He acknowledged a Democratic wave could bring scrutiny of Trump's pro-crypto pardons, including his own, but said he has "nothing to hide" and welcomes any inquiries.
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