The CEO of the Binance cryptocurrency exchange considers that entrepreneurs should issue their own cryptocurrency. He said that investing in crypto assets like BTC, ETH and BNB is not usually a good deal.
Changpeng Zhao considers that the more than 8,000 cryptocurrencies and tokens existing now are insufficient. The CEO of the Binance exchange thinks that there should be millions of crypto assets.
The businessman expressed that opinion in a recent post titled One Coin to Rule Them All? Or Millions of Coins? He predicted that people would continue to create new tokens for their projects, which would lead to millions of them. He clarified that most of them will fail while those succeeding will build a lot of value for the world.
Zhao does not only believe that this will happen but also wishes that it will become a reality. He said that entrepreneurs should issue their own currency, about which he talks to executives from other companies. He commented that they usually change their perspective on cryptocurrencies and their relevance in the future.
How Companies That Issue Their Own Cryptocurrencies Benefit
The CEO of Binance argues that a company that creates its own token or cryptocurrency can benefit in three ways.
First, they can raise high sums of money at launch through initial coin offerings (ICOs). As a consequence, they provide early investors with low-priced coins.
Second, the team can hold coins, which they sometimes sell later if the price of the crypto asset increases. In that way, the company issuing them receives economic benefits.
Finally, Zhao believes that their token can allow a new ecosystem to retain users.
Launching Rather Than Buying Cryptocurrencies Is Usually a Good Deal
The companies issuing tokens and cryptocurrencies consider the launch is usually a good deal, which is true about Binance and other exchanges. The fee costs for trading and withdrawing them report multi-billion-dollar profits to those platforms.
If the projects are not fraudulent, investors who enter pre-sales usually make a profit.
Of course, the problem can be to assume that those projects will continue to appreciate in the long term. For example, those involved with Bitcoin (BTC) and other cryptocurrencies know of fads that sometimes arrive and attract all the attention.
One of the fads hitting the Bitcoin universe in 2017 and 2018 was the ICO fever. There were dozens of new initial coin offerings daily, and the issuers of those assets collected thousands of bitcoins. Almost five years later, most of those projects failed to transcend, although they seemed extremely promising.
According to the investment in their currency, the projects that failed include EOS, IOTA, and Cardano (ADA). Even though their price in US dollars increased, it still does not exceed the figure that BTC reached in March 2017.
Investors See Bitcoin as a Reliable Crypto Asset
People continue perceiving BTC as the old trusty one because of its monetary policy. It has a limited supply of 21 million coins, its halving occurs every four years, and the market and miners support it. The decentralized cryptocurrency created by Satoshi Nakamoto has gained strength for 13 years since its release.
Bitcoin may not make people rich overnight, but they eventually make significant gains after investing in it. Nakamoto did not create the cryptocurrency to help anyone become a billionaire but give individuals financial sovereignty.
Bitcoin has not disappointed anyone who has understood its properties in the long term. After knowing those features, they have chosen to use the first cryptocurrency as a store of value.
By Alexander Salazar
