Changpeng Zhao (CZ), founder of Binance, has issued a warning to cryptocurrency investors, emphasizing the dangers of short-term speculation and risky investments. He pointed out that many investors, particularly those engaging in “degen” trading by purchasing low-value tokens and meme coins, suffer substantial losses. Instead, CZ recommended prioritizing long-term and sustainable crypto projects to navigate the volatile market successfully.
Long-Term Strategy: The Key to Success
CZ encouraged investors to conduct in-depth research before investing in any project. He stressed that market volatility is often fueled by uninformed investment decisions, leading to liquidity issues and frequent “rug pulls.”
“Excessive resources are spent for small gains in the crypto market. Strong teams behind long-term projects provide more stable returns over time.” – Changpeng Zhao
CZ highlighted that well-established and reliable crypto projects are less prone to sudden crashes, making them better options for long-term financial gains.
New Token Distribution Regulations Proposed
To reduce market manipulation and speculative movements, CZ suggested revamping token launch mechanisms. Under his proposal:
- Only 10% of tokens would be initially available, with the remaining 90% released gradually based on milestones.
- Token distributions would be governed by smart contracts and third-party audits to enhance transparency and security.
- These measures aim to minimize price crashes and increase investor confidence.
CZ argued that poorly structured tokenomics often contribute to sharp value drops, hurting retail investors. By implementing stricter release schedules and audits, projects can establish stronger investor trust and reduce market instability.
Binance’s Relief Efforts for Investors
In response to recent memecoin crashes, Binance has launched a relief initiative aimed at supporting affected investors. Reports suggest that hundreds of thousands of dollars will be allocated to projects promoting transparency and sustainability.
These efforts reflect Binance’s broader goal of creating a healthier and more responsible crypto ecosystem, aligning with CZ’s vision for long-term market stability.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Readers should conduct their own research before making any financial decisions.
