Not a bad time to invest: Binance CEO CZ shares his thoughts on the crypto crash

What’s the wise thing to do now, in the depths of a bear market? Find out what the most influential people in the industry think about it.

The authors of the Bankless podcast had thought exactly the same and invited CZ, the founder and CEO of Binance. We, in Buidlb, listened to the podcast and are ready to tell you about CZ’s answers to the most critical questions about the crypto winter.

What is the secret of surviving during the market crash?

Binance feels fine now. We don’t have any debts and we’re still profitable. That is because even in the bull markets, we have always had the mentality that Bitcoin can go down over a while, and it may last for months or years.

And that was a winning strategy because those companies that are not faring well now expected that the bull market would continue indefinitely. But markets don’t do that. They always go in cycles. So, we held a fairly large amount of cash reserves during the bull market, and also get our income in different cryptocurrencies, including stablecoins. It takes 25–30% of our income.

What to do now?

For industry players like Binance, now it’s actually the best time to hire talent. There’s much more talent available in the pool now, and we also have fewer other companies competing for the same talent with ridiculous compensation. A year ago, if a university graduate out of college knew Solidity, they could get an offer for half a million dollars a year. Now we’re seeing much more reasonable situations in the industry.

For retail investors, the first thing, of course, is to survive. So make sure that you have enough money so that your lifestyle is not impacted. The second thing is that if you have extra money now, it’s not a bad time for investing. Focus on a small number of projects that you know well. Still, tolerate the risk because tomorrow, the market may go down even further. 

How long will the bear market stay?

It’s very hard to predict the future, but historically, we’ve seen very accurate four-year cycles. It doesn’t mean that the next cycle will be exactly four years, but I think there’s a pretty decent probability that might happen.

If we also look at all the other different things — the inflation, the war, everything else — those things should really help the crypto industry. The inflation should push people to want to hold a limited supply asset. As for the war, the more the world is divided, the more the Bitcoin is a very global currency that shines.

Just in case it takes a long time for a crypto to repair, I recommend companies have at least ten years of cash if they have zero income. Very few traditional companies can achieve that, but in the blockchain world, it’s not that hard to achieve.

What will happen to the industry in the future?

The longer-term horizon is that the industry is staying. There are more apps being developed, there are more people in the industry, so the industry is going to get bigger if we look at 5–10–20 year horizons.

So we’re all here, we’re not going anywhere, we’re just consistently and persistently pushing this industry forward. And I think 20 years from now, people will be using blockchain and crypto the way they use the internet today — without mentioning it. I mean, we don’t say, “Hey, I’m going to use the internet to message you,” we just use it.

But even in 10 years, it might still be a little bit tough, to be honest. If you look at the internet today, we have bugs sometimes with video conferencing, etc. But eventually, people shouldn’t be talking about blockchains, consensus, nodes, and all this other geeky stuff; people should be like, “Hey, I’m sending you some money,” “Hey, I’m doing a fundraising globally,” “Hey, I’m selling my art globally,” etc.

All of these things should come naturally, and we will get there; it’s just a matter of time.