Binance founder and CEO Changpeng Zhao points to herd mentality as one of the causes of bitcoin’s price volatility.
“The herd followers are less committed,” Zhao said in an interview with Bloomberg TV Monday. “Whenever there’s some negative news, they run away. Whenever there’s positive news, they try to rush in.”
The founder of the world’s largest crypto exchange said that “die-hard fans who understand and really love the project” usually buy to hold.
Zhao, who goes by CZ, added that it isn’t only retail traders who cause the price of the world’s largest cryptocurrency by market capitalization to fluctuate.
“There are also large institutions that do volatility trading,” he said.
“They seek volatility and they sometimes even want to generate the volatility. So it’s not to say that just because there’s more institutions trading, then there’s less volatility.”
The CEO added that companies like Microstrategy that buy large amounts of bitcoin to hold reduce volatility and even “push the price up permanently.”
MicroStrategy, helmed by...read more...