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Investing.com – Investors can’t expect the crypto bear market, which has so far tracked alongside equity market sell-offs, to have a predictable end. But, past cycles suggest, “we could observe a quick recovery starting next year.”
That’s what Changpeng Zhao, CEO and founder of Binance, the world’s largest cryptocurrency exchange, said at Web Summit 2022 in Lisbon. Or as he put it, cryptocurrency sector rebounds after a bear market, “are very fast, as we saw after the 2018 crypto winter.”
Normally, Zhao said in an exclusive Q&A session for the media, “any big drop in this market will last about a year, so we might see a recovery from 2023 if history repeats itself.”
On a practical level, bear markets can offer “a lot of opportunities” as they allow bigger players like Binance the chance to “purchase smaller competitors” and gain more market share because of lower market valuations.
In a bull market, the exchange founder added, “you just have to worry about raising money and funds for your business.”
In 2021, Binance recorded trading volumes of $7.7 trillion with peaks recorded during all-time highs of Bitcoin in November of that year. Revenues jumped to $20 billion from $5 billion the previous year.
But 2022 has not been all sunshine and roses. The liquidity crisis that has swept through major crypto platforms such as Celsius, and the domino effect caused by the collapse of the Terra/Moon stablecoin infrastructure LUNAt/USD have led retail and institutional investors to be more reluctant about an asset class still perceived as speculative by most of the financial world.
However, the platform still has ample leeway. According to Zhao in an interview at the Web Summit with Bloomberg, the crypto exchange is considering the acquisition of a bank to shorten the gap between the world of traditional finance and cryptocurrency.
With financial giants such as Goldman Sachs (NYSE:GS) setting their sights on the crypto world despite the market cap collapse, Binance wants “to be the bridge between cryptocurrencies and the traditional financial world.”
“Traditional banks, payment service providers, and licensing. We’re looking at these things,” the CEO said, adding that he “wants to capture some of the capital raising capacity” of banks that partner with Binance since “valuations go up exponentially once we bring in our clients.”
The crypto exchange also recently confirmed that it had invested $500 million in Elon Musk’s acquisition of Twitter (NYSE:TWTR), with the goal of “playing an important role in bringing social media and the Web3 together to expand the use and adoption of cryptocurrencies and blockchain technology,” as communicated by the platform itself.
