This year’s crypto rally is most certainly proponed by the arrival of big institutions and tech companies as are Facebook, JPMorgan or Amazon. However, Changpeng Zhao, the CEO of Binance, the world’s largest online exchange thinks that individual investors are still playing a key role in driving the dramatic price booms. He said that institutions were not seen growing faster:
“The number of institutions coming into this industry has not increased that tremendously in 2019 yet.”
At Binance, individual investors account for about 60% of trading volume, that’s around the same percentage as last year.
Let’s just mention that last week, Binance began margin trading, meaning allowing all traders to borrow up to three times the amount of money they put down, and 10,000 traders signed up on the first day, borrowing $15 million in funds. CZ said he thinks that the majority of people by the end of the year will be using margin in some capacity. He also added margin trading is quite safe to use and that there will be more trading volume and potentially higher volatility.
Let’s not forget that Bitfinex also recently allowed traders to borrow up to 100 times their deposits on certain products. With that in mind, it’s easy to see how traders have driven Bitcoin’s price up 36% since the beginning of June.
In 2017 Bitcoin went from $1,000 valuation to almost $20,000 in just a few months, 2018 was pretty much a year when all went downgraded. This year, however, the spike has been relatively constant, starting with almost $3,000 in BTC price and leading up to a maximum of $14,000 so far. Nevertheless, most of the crypto community is still waiting for Bitcoin’s dominance to slow down and an altcoin season to start.
Zhao said that having so many applicable blockchain projects with actual blockchain values behind them, give the price consolidations much more legitimacy than they had in 2017, which was just formulated hype behind one cryptocurrency that spilled over into altcoins as well.
This year though, once the BTC stops its spike to a predicted $20,000 again, it’s likely that major altcoins like LTC, ETH etc. will reach peak market capitalizations over the course of the remainder 5 months in 2019.
Zhao didn’t comment recent attempts of U.S. Government to stop cryptocurrency growth, in any way possible. However, it seems that it doesn’t bother him much. Last week Binance announced the official launch of Binance Singapore in partnership with Vertex Ventures China and Vertex Ventures Southeast Asia and India following two months of operation, during which it saw Binance Singapore’s user base grow by around 20 percent per week with a substantial increase in daily trading volume.
CZ, expressed optimism towards the direction the government of Singapore has taken in regulating the local crypto sector. He said:
“Absolutely Singapore will grow into a major market. The Singaporean government has an in-depth understanding of cryptocurrency and is quite open towards financial innovation. So far, based on everything we have seen, we strongly believe Singapore will lead the next financial revolution that is about to happen.”