Is the Binance Debacle & CZ Resignation Bullish?

26 Nov 2023 by Rory Kejzerko 2 min read

Whilst onlookers - especially those on the periphery of the crypto space - will see the resignation of Binance CEO Changpeng ‘CZ’ Zhao as rather bearish for the DeFi movement, a recent research report from JPMorgan (JPM) suggests otherwise.

From an objective sense, the exchange’s $4.3 billion settlement with the US government will most certainly hurt its balance sheet in the short run, however this may prove to be trivial in the grand scheme of things…especially when it comes to the crypto industry at large.

This is because Binance’s headlining-hitting fine represents a lesser of two evils… as in essence, a massive lump sum payment is more favourable than a complete exchange collapse (i.e. something that’s been a lingering fear of many Binance observers over the past year or so).

Additionally, the government’s intervention can also be seen as part of the ‘ongoing shift towards regulated crypto entities and instruments’ - an endeavour that’s been of main priority since the fall of Binance rival FTX.

In turn, increased regulatory clarification and oversight should hypothetically attract more investment interest from onlookers from the TradFi realm. And as we all know, this is a development that will likely be catalysed and multiplied by the imminent arrival of Spot Bitcoin ETFs in 2024, which will come to market courtesy of gigantic finance institutions such as BlackRock, Fidelity, Grayscale, and more.

A final bullish talking point that the report - authored by JPM Managing Director Nikolaos Panigirtzoglou - references is the increased clarity regarding Binance’s BNB Smart Chain ($BNB), as such blockchain ecosystem had previously been losing market share due to the uncertainty that surrounded the exchange and its ever-controversial (former) leader CZ.

With this in mind, CZ’s long-running stint as the Binance’s front-face may also do wonders for the exchange, as with polarisation can also come FUD (so let’s also hope that new CEO Richard Teng isn’t as controversial).

Here, with its native token being backed by a more-confident cohort of investors and holders, Binance may be able to start acting like DeFi’s apex centralised exchange (CEX) once again.

Further, Panigirtzoglou forecasts that BNB’s lost market share - as well Binance’s damaged reputation in general - will begin recuperating once settlement outcomes become clearer.

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