Hong Kong – Binance founder Changpeng “CZ” Zhao believes the convergence of stock markets and crypto is entering a new era of digital assets.
However, he warns that the sector still faces significant risks, especially as these structures have gained traction, particularly as they enter the first major bull cycle.
Speaking in Hong Kong’s BTC Asia, CZ said moves by public companies to hold Bitcoin BTC$111,379.45 Other cryptocurrencies on the balance sheet (according to the example set by MicroStrategy) mark breakthrough moments.
“In the world’s largest economy, 90% to 95% of money is managed by institutions,” he said. “Even ETFs and finance companies, those people couldn’t take part in crypto in a large-scale way.”
By bringing encryption to the US stock market, Hong Kong and beyond, the industry effectively “encrypts the stock market or brings crypto to them” and “depending on how you see it.”
Tokenization Push
Zhao pointed to another transformative trend, beyond Bitcoin’s Treasury and ETFs, tokenization of Real World Assets (RWAS). It is symbolized by stability, the Ministry of Finance’s bills, goods, real estate, and even the flow of personal income, pouring “hundreds of millions and billions” into the crypto economy.
“We’re going both ways,” CZ said. “The stock market now has access to crypto. We bring real-world assets into crypto. This is great.”
The risk of overcoming
Despite his enthusiasm, CZ warned that not all companies pursuing this strategy will be successful.
Some companies may use the Cryptocurrency Department as a way to “raise stock prices,” while others lack the expertise in managing investments in complex baskets of digital assets and crypto startups. He said, especially when the market changes.
“We’re in a bull market right now,” Zhao said. “But in the end there will be winter and there will be a bear market. Finance companies will have to go through at least one cycle.”
MicroStrategy (MSTR) said it endured a painful first cycle but later benefited as the average Bitcoin cost base fell.
Stability and estimation
CZ argued that in the long run, a massive inflow of capital from institutions and stock markets should reduce volatility.
“Essentially, the higher the market capitalization, the less volatility,” he said. “It’s just physics. A bigger ship is more stable.”
However, he admitted that the stock market is full of speculative traders. This means that short-term volatility can increase despite the overall asset class becoming more stable over time.
Beyond Bitcoin
While Bitcoin remains a central figure in most financial strategies, CZ noted that other tokens have also been adopted, including the recently launched BNB Treasury Company.
However, for small, new tokens, the risk increases. “The more mature the ecosystem, the less risk it is,” Zhao said. “New ones may have higher risks and higher returns, but established ones are safer bets.”
In the case of CZ, the fusion of crypto and traditional markets is overwhelmingly positive through Bitcoin’s finances, ETFs and tokenized RWA. Still, he urged his attention.
“Not all finance companies increase their value,” he said. “Investors need to evaluate them carefully, understand the risks and prepare for the cycle.”
Read more: Bitcoin is under pressure as gold quietly targets new records
