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According to Changpeng Zhao, the crypto faithful are in it for the technology, as opposed to benefit chasers searching for the next “moon-shot gem.”
Binance CEO Changpeng Zhao reflected on Bitcoin (BTC) fluctuations, saying that the biggest cryptocurrency by market capitalisation is likely less volatile than the equity prices of similarly-sized firms by market capitalisation, such as Apple and Tesla.
Data from Woobull shows Bitcoin’s 60-day volatility steadily declining since the start of 2021. However, figures from the investment research portal AlphaQuery show that Tesla and Apple stock prices still have significantly lower 60-day volatilities over the same period.
Speaking during an interview with Bloomberg TV on Monday, the Binance chief argued that crypto’s volatility was not unlike the situation in the stock market, adding: “Volatility is everywhere […] It is not unique to crypto.”
“There’s always a large number of people having the herd mentality than the guys who actually do serious research.”@cz_binance, founder of the world’s largest cryptocurrency exchange Binance, discusses volatility of #cryptocurrency markets on @BloombergTV pic.twitter.com/UAT4Kpy1tu
— Bloomberg (@business) May 3, 2021
According to Zhao, yield chasers, who are mostly not as loyal to crypto ventures as true believers, are often to blame for choppy market movements due to their huge numbers.
“There is always a large number of people who have the herd mentality rather than the guys who do serious research.”
“Whenever there is some negative news, they [herd followers] flee, and whenever there is some positive news, they try to rush in, and so they do cause more volatility,” Zhao said.
The executive’s description of crypto believers as “die-hard fans who understand and truly love the project” is consistent with his previous comments about his personal attitude towards the industry as a whole.
Zhao disclosed in April that cryptocurrencies account for virtually all of his nett worth.
The crypto market is having a strong Monday, with overall market capitalisation up more than 4.5 percent in the last 24 hours.
The ascent of Ether (ETH) to the $3,000 mark for the first time has been the highlight of the day, especially among the top-10 ranking tokens by market capitalisation.
Bitcoin seems to be headed for a test of $60,000 for the first time since mid-April, which followed a modest correction below $50,000 on April 24.