After FTX bankruptcy: Binance boss CZ calms crypto market

Dhe bankruptcy of the crypto exchange FTX continues to spread at the beginning of the week. On Monday, announcements by Binance boss Changpeng Zhao, called “CZ” for short, caused price gains. Bitcoin increased by almost $1000 to more than $16,700, Ethereum rose from around $1185 to around $1260 most recently. CZ had announced that it wanted to set up a fund to save the industry. This was intended to avoid a domino effect from the FTX bankruptcy and to support “strong projects” that ran into liquidity bottlenecks. Even Solana, which is seen as closely related to the FTX empire, which fell by around two-thirds in the past week, recovered from around $12 to as low as $15.

As is so often the case, there was no further information about the fund, such as how large it should be. Meanwhile, Zhao invited other crypto companies to participate in this fund. In addition, CZ, who is better known for crossing paths with regulators, called for clear regulations for the industry at the G-20 meeting in Bali. The industry has the common task of protecting consumers. However, this is not the sole task of the regulatory authorities. Rather, the industry must increase transparency – precisely the lack of it is one of the things that are often opposed binance allegations made. On the other hand, Zhao called for Indonesia to reform crypto taxation and make licensing easier.

Following recent events, many wealth managers are threatening to steer clear of crypto assets. In this respect, Zhao’s current demands are at least understandable. It has become clear that these will not find a place in institutional asset allocation, Hani Redha of Pinebridge Investments told the news agency Bloomberg. There was a time when they were viewed as a potential asset class that every investor should have in their strategic asset allocation. This is now “completely off the table”.

The collapse of FTX raises questions about the viability of the crypto ecosystem, Salman Ahmed, chief investment strategist at mutual fund Fidelity International, told Bloomberg. It has always been difficult to find arguments for the inclusion of cryptocurrencies. Now the system has come under even more pressure.

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