Binance co-founder and CEO Changpeng Zhao, popularly known as CZ, is considered as one of the most sane minds of the crypto industry, and certainly one of the most credible ones. He is known to react little to what others say or do, until and unless it is too serious.
For instance, when Craig Wright infamously claimed to be Satoshi Nakamoto, CZ didn’t react much, but as soon as Wright started intimidating people with legal suits, he took a firm stand and delisted Bitcoin SV, Wright’s creation, from his crypto exchange. Similarly, while many industry players have boasted supernatural figures for Bitcoin, like $100,000 and $1 million, he remained grounded, and simply predicted a ‘positive growth.’
When the big guns of crypto wasted no time reacting to US President Donald Trump’s negative remarks, CZ remained silent and hasn’t spoken on it yet. However, he has spoken on the Bitcoin, and his views are alarming, to say the least. While many experts are boasting that Trump’s tweets won’t affect Bitcoin growth, CZ has pointed out another problem facing the markets, which is equally, if not more, important, which is lack of institutional adoption.
In a recent interview, CZ stated that the growth of Bitcoin in the future largely depends on institutional adoption because retail investors have made the market extremely volatile. He informed that about 60% of the market is still occupied by retail investors, which is as much as last year, through sheer numbers for both factions have grown in 2019. He further said,
We have not seen institutions growing faster. What we’ve seen is a pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet. I would say the majority of people by the end of the year will be using margin in some capacity. It’s quite safe to use, to be honest. There will be more trading volume and potentially higher volatility.
The bullish run of 2017 was mostly fuelled by retail investors, and hence despite that excellent run, the fall of 2018 exposed the volatility which continues to plague the market. On Sunday, Bitcoin closed the market on $10,234 apiece, falling for three consecutive days. While some are attributing the loss to Trump’s comments, it could also be due to the volatile nature of the market due to the dominance of retail traders.
Also, there is a surge in companies, including Binance, offering margin trade, which is expected to rule the retail roost in the future. If companies don’t step up their efforts to spread institutional adoption, volatility continues to prevail, costing severe market tantrums. However, the future for institutional adoption seems ripe, as companies like Facebook, VISA, MasterCard, PayPal, Uber, etc. have stepped on the scene with Libra.