As crypto prices fluctuate, Binance CEO urges investors to hold on to their crypto investments

Key points: 

• CZ urged people who don't have extra money for investments to stay away from the market.
• He advised acting carefully for those who can invest but have little experience, as markets are unpredictable these days. 
• Binance CEO assures that his platform has no debt and doesn't give loans out of the platform.
• From his words, there is a high probability that DeFi will replace CeFi, and he is ready for that. 

Binance CEO Changpeng “CZ” Zhao urged defaulted and inexperienced investors to stay away from cryptocurrency trading amid extreme market volatility and unpredictability.

On Nov. 14, on the “Ask Me Anything” Twitter account led by Binance, CZ suggested that undemanding investors should wait for the turbulent period to end, rather than risking the funds they need to make ends meet:

“You should not invest in crypto if you’re using money that you need for next week or next month, you should only be using discretionary cash that you don’t need for a long time, like maybe a couple of years.”

For those with extra cash, Zhao advises novice investors and traders to think twice before committing any money to the market in the near term:

“If you don’t know what’s going on, don’t try to guess what’s going to happen. It’s very hard to predict. So we will go through a period of high volatility and unpredictableness.”

"So unless you're very experienced, very mature, very confident, and can handle the risk, I'd suggest most people stick around that long," he added.

The FTX crisis negatively impacted the entire industry, especially some centralized exchanges that had to suspend payments, causing market volatility to spike temporarily.

But Zhao confirmed that Binance has no such problem. When asked why users should trust the exchange, he mentioned the company's balance sheet:

“We don’t have loans. We don’t have debt. We don’t owe anybody any money. We also did not give loans out of the platform. So we never take user assets and give it to a third party to manage and try to make yields.”

Zhao confirmed that Binance saw a pullback following the FTX crash and several other events that caused community confidence in centralized exchanges to drop.

He reiterated that even if Binance goes down, the platform will not prevent its users from withdrawing funds.

“If everyone withdraws their funds from centralized exchanges, we will shut down centralized exchanges. We have many other profitable businesses,” he said.

Zhao also believes that such an event is entirely possible, noting that once decentralized finance (DeFi) applications become mainstream, centralized exchanges may no longer be necessary:

“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don't need to exist, which is great.”

Although the Binance exchange is centralized, Zhao emphasized that the company's investment partners include centralized exchanges and decentralized protocols to provide user choice and help entrepreneurs build.

“We’re technology agnostic. We’re not trying to centralize everything. We’re not trying to put everyone on a centralized exchange. If you’re good enough to use a decentralized exchange, go for it.”