The recent significant decline in Bitcoin’s value is primarily due to investors reducing their positions in digital assets and a broader trend of risk aversion across global markets, according to Binance CEO Richard Teng.
Bitcoin, the largest cryptocurrency by market capitalization, experienced a sharp drop last month, extending a three-month decline. This downturn follows a period of substantial gains, with Bitcoin reaching record highs earlier this year.
In a recent media interaction, Teng emphasized that this trend is not isolated. He stated that asset classes experience cycles and fluctuations. He explained that the current situation involves a reduction in risk appetite and deleveraging, affecting not just the cryptocurrency market.
This pullback coincides with widespread selling pressure in global markets, fueled by investor concerns about inflated valuations, despite strong earnings reports from some companies.
Despite the sharp correction, Teng pointed out that Bitcoin remains significantly higher than its value at the beginning of the year, a period that saw major financial institutions enter the digital currency market. He added that the sector has performed strongly over the past months, making profit-taking a natural occurrence. He described the correction as healthy, providing the market with an opportunity to consolidate.
Regarding the situation of Binance’s founder, Changpeng Zhao, Teng clarified that no decision has been made regarding his return. He noted that Zhao remains a controlling shareholder with significant shareholder rights.
The CEO emphasized that he is working daily with a board of directors to develop a future strategic roadmap for the company, navigating the regulatory and financial challenges facing the digital asset sector globally. The board includes independent members and an independent chairman.
