Market Cycle: Rising Bottoms, Historical Highs Become New Support
Changpeng Zhao (CZ) reiterated his view on the four-year crypto cycle, stating that the current 50% drawdown is normal compared to the 80% crashes in previous cycles. Citing the 2022 Luna collapse and FTX meltdown, which drove Bitcoin to $16,000, he noted that the current price is 4–5 times higher, with each cycle starting from a higher floor. Factors like increased developer activity, national adoption of Bitcoin, institutional involvement (BlackRock), and BNB ETF listings are contributing to this trend. Although not a technical analyst, CZ observed that "previous highs often become future lows," citing the $60,000 level from 4–5 years ago as a potential support.
TradFi & Crypto Convergence: Centralization and Decentralization Cohabiting
CZ views crypto as a new tech tool enabling fast, low-cost, transparent financial transactions. He believes the two worlds will merge into a single "fintech industry." Notably, no institution has recently disclosed near-bankruptcy, and leverage across the industry is better controlled—a healthy sign. On centralization vs. decentralization, CZ argues both will coexist: decentralized spirit allows anyone to participate, but centralized platforms like Binance provide cheap, secure, user-friendly services that drive network effects. He dismisses the notion that everyone must use Bitcoin, as true decentralization includes centralized actors. Regarding L1 vs. L2, CZ predicts L1 will ultimately prevail, citing Ethereum’s Vitalik Buterin refocusing on L1 after realizing L2s don't help L1.
Hyperliquid and Prediction Markets
CZ praised Hyperliquid for creating a new market niche: a no-KYC, purportedly decentralized perpetual exchange that Binance cannot compete with. He noted that Hyperliquid founder Jeff participated in Yzi Labs’ earliest incubation program. On prediction markets, CZ called them "a great invention" and welcomed regulatory support for Polymarket and Kalshi in the US. He expects 100 to 1,000 prediction market projects to emerge, all needing responsible execution.
Investment Philosophy: Three Verticals with Impact Focus
CZ disclosed Yzi Labs’ allocation: 70% crypto, 20% AI, 10% biotech. The goal is "impact" rather than financial return. For example, he would gladly lose $1 billion on a drug that cures millions cheaply. Specific biotech investments include an artificial womb company (already tested on mice, human application in 5–10 years) and a knee cartilage regeneration technology using 3D-printed scaffolds (early human trials). He also invests in AI robotics but is most excited about biotech.
AI & Crypto: Symbiotic Relationship, AI Needs On-Chain Payments
CZ personally uses multiple AIs (OpenAI, Anthropic/Claude, Deepseek, Kimi) and notes varying availability across countries. While US LLMs are more precise, Chinese models are competitive. He warns that AI is far more dangerous than crypto—it can hack computers or design nuclear weapons—and requires careful regulation. Crucially, AI agents cannot use traditional payment systems (2FA, KYC), but blockchain's API-driven nature is perfectly suited for AI. Even if hot money flows to AI, those funds will eventually move on-chain, boosting crypto volumes.
