Binance's founder suggests multiple factors behind the crypto market's 50% plunge over the past year.
By Nikhilesh De|Edited by Jesse Hamilton Jun 27, 2026, 1:00 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Changpeng "CZ" Zhao discusses the reasons behind the downturn in cryptocurrency markets and future expectations. (Nikhilesh De/CoinDesk)SummaryShow- Changpeng "CZ" Zhao, the founder of Binance, attributes the crypto market's downturn in 2026 to several factors.
- He noted that investments in AI firms may have diverted capital away from cryptocurrency, but he views this as a long-term positive.
- CZ commented that the failure of the U.S. Clarity Act to pass might not significantly hinder crypto regulation in the U.S. due to ongoing global regulatory advancements.
Changpeng "CZ" Zhao, the founder of Binance, emphasized that there isn't a straightforward explanation for the cryptocurrency market's dramatic 50% drop in the initial half of 2026.
He pointed to geopolitical tensions, a shift in investor focus towards AI, and the regular four-year market cycle as potential contributors to the sustained price drop in Bitcoin BTC$60,478.47 and other cryptocurrencies during an exclusive interview with CoinDesk. Bitcoin, the largest cryptocurrency, has been on a steady decline since last year, starting 2026 trading near $89,000, peaking at just above $96,000, and then falling to around $60,000, where it currently trades.
When looking back over the past year, the situation appears even bleaker; Bitcoin, which CZ indicated is closely linked to Binance's success, reached an all-time high exceeding $126,000 last October, marking a roughly 50% decrease since then.
CZ maintains a long-term optimistic outlook for the crypto sector, although this perspective is not entirely altruistic, as a significant portion of his wealth is tied to the BNB token, indicating that he has a vested interest in the vitality of the crypto market and his exchanges, Binance and Binance.US. His viewpoint is shaped by over ten years of experience in the cryptocurrency industry.
Read More: CZ, Binance founder, wants to clear up 'misunderstandings' about who he is
"In the long run, the industry will continue to evolve," he stated. "The demand for financial technologies will grow as transaction volumes increase, leading to industry expansion. Therefore, I am not concerned about the market or short-term price fluctuations."
CZ believes that the influx of investments into "new industries like AI" represents a positive trend for the future of the crypto sector.
He also mentioned the rapid emergence of prediction markets as a beneficial tool for price discovery and liquidity, stating, "We can price things much more accurately and predict outcomes better."
While CZ acknowledged that prediction markets have a gambling aspect, he noted that speculation is a common element in all financial markets. "Speculators provide liquidity, so their presence is beneficial," he remarked.
Policy Futures
The potential landmark legislation for crypto in the U.S., the Digital Asset Market Clarity Act (or Clarity Act), could be enacted by year-end if legislators resolve outstanding issues, including an ethics provision for government officials, particularly the president.
However, CZ remarked that the Clarity Act and other individual legislative measures are "small, tactical things" that, while significant, won’t affect the long-term growth of the crypto sector.
Even if the Clarity Act fails to pass this year, CZ anticipates that the U.S. will maintain a leading role in cryptocurrency regulation, as other nations continue to implement their own frameworks for digital asset governance.
He noted that the U.S. will likely remain competitive with other countries in establishing regulations, having already introduced the stablecoin-focused Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
"I certainly hope to see it pass, as other countries may adopt similar regulations if it does," he said. "If it gets delayed, other nations might advance sooner."
On the ethics issue, CZ acknowledged that after the upcoming midterm elections in the U.S., if Democrats gain control of at least one congressional chamber, they may scrutinize President Donald Trump's pro-crypto policies, including pardons granted to crypto executives, one of whom was CZ.
"I hope they recognize that crypto is a vital industry for the U.S., with many Americans holding cryptocurrencies," he stated.
Read More: Post-prison CZ says time behind bars didn't hurt the billionaire's business after Binance
When asked if he would comply with potential new legal demands from Democrats, he responded, "there's nothing to hide."
"There will be increased scrutiny, more inquiries, and greater clarity," he added. "We are more than willing to provide information if requested."
Politics
The outcome of the November elections could directly impact him, but he expressed that there is little he can do regarding the U.S. political landscape, stating this during an interview in Washington where he had arranged meetings.
"I try to stay as detached from U.S. politics as possible," he said. "This is primarily a challenge for U.S. stakeholders to resolve. We are happy to assist in some capacity, but there are limits to our involvement."
Other figures in the crypto space, such as Coinbase CEO Brian Armstrong and Ripple CEO Brad Garlinghouse, have been actively engaged in U.S. congressional elections, supporting one of the major political action committees, the Fairshake super PAC. However, foreign nationals are prohibited from direct participation in U.S. politics.
While he refrains from engaging in U.S. elections, CZ hinted at a sentiment prevalent among crypto leaders: that crypto supporters will be significant voters.
"Individuals who are against crypto may face considerable electoral losses," he remarked.