The bosses of Binance and ShapeShift have been speaking out on the bullish prospects for bitcoin and crypto more generally.
Let’s start with Binance founder and chief executive Changpeng Zhao (CZ). He reckons it is just a matter of time before the next crypto bull run begins.
By his own admission he doesn’t know what the catalyst will be but says “I am certain it will happen… Sooner or later, something will trigger it.”
He also reckons his exchange is in good shape from a business aspect, even though volumes are down 90% from the highs achieved in December 2017.
Binance trading “huge volumes”, still profitable
But comparing today’s volumes with a year or two years ago “we’re still trading at huge volumes”.
“Compared to January [of 2018], we are probably down 90 percent. So we only have one-tenth of the trading volume compared to what we had in January. But, compared to like a year or two years ago, we’re still trading at huge volumes. Business is still okay, we are still profitable, and we are still a very healthy business,” CZ explained.
On both counts – the bull run and business health – it is difficult to expect CZ to say anything else. After all he is hardly likely to say “volumes are garbage and we are making no money”.
Binance has grown to become the largest crypto exchange on the back low trading fees and reliable backend infrastructure. Binance led the way with exchange tokens. It BNB token can be used to pay trading fee, with customers using the token pay lower fees.
Binance was the first crypto exchange to announce support for the Bitcoin Cash fork.
CZ was speaking on CNBC’s CryptoTrader programme (watch below).
ShapeShift boss sees US debt mountain dooming fiat, catalyst for crypto
Another exchange boss making waves today is the chief executive of ShapeShift Erik Voorhees. He thinks the growing US debt mountain will eventually blow up when the those debts fall due.
The only problem with that prognosis is that the US dollar is the world’s reserve currency which means it can exploit seignorage (profit from controlling money supply – a word that stems from the days when monarchs held the monopoly on minting coins).
Quantitative easing has seen the US Federal Reserve effectively print money but there has been no inflation or collapse in trust in the dollar’s value.
On the contrary it helped to stabilise the financial system after the crisis of 2008/9.
Having said that, Voorhees does touch on the fact that people might believe that fiat money is a problem and regardless of whether it is the crux of the matter, to a certain section of the population, for whatever reason, leads some to prefer crypto to government money. It was the same with gold back in the day – the recipient could trust that it represented a certain quantity of value.
So we think ShapeShift’s Voorhees is mistaken to reduce economic problems to the type of money the system uses. That is too superficial and doesn’t explain why real wages and profit levels have been falling in the advanced economies since the mid 1970s.
When the next global financial crisis occurs, and the world realizes organizations with $20 trillion in debt can't possibly ever pay it back, and thus must print it instead, and thus fiat is doomed… watch what happens to crypto.
— Erik Voorhees (@ErikVoorhees) November 8, 2018
And as with CZ from Binance, we have to take such throw-away remarks as exchange bosses understandably pumping the prospects for the crypto sector because they would be the direct beneficiaries.
The views of our two chief execs above are at variance with those of another high-profile exchange boss Arthur Hayes of BitMEX. He thinks the bear market will persist for another 12 to 18 months.
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK’s second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane