Market Cycles: Higher Lows and $60K Support
CZ believes the four-year cycle thesis still holds. The current drawdown of ~50% is far less than the 80% declines seen in previous cycles (e.g., Bitcoin bottoming at $16,000 after Luna/FTX in 2022). Today's Bitcoin price is 4-5x higher, and each cycle starts from a higher base. He cites sovereign adoption, institutional involvement (BlackRock, BNB ETF), and growth of stablecoins and RWA as structural improvements. Technically, the previous all-time high (~$60,000) often becomes a support level for the next low, a pattern observed over several cycles.
Traditional Finance and Crypto Convergence: An Inevitable Fintech Industry
CZ argues that crypto is not a standalone industry but a new technological tool. Traditional financial firms can build on blockchain, while crypto companies offer lending, savings, stock trading, etc. 'Crypto and traditional finance should not be separated; this is simply a fintech industry.' He believes centralization and decentralization will coexist, with technology driving decentralization over time. Centralized players that offer high-quality services at low cost will benefit from network effects, while those abusing monopoly power will eventually lose market share.
Decentralization Spirit: National Blockchains and Consumer Choice
Regarding the trend of nations wanting their own blockchains, CZ views it as a transitional phase. If Wall Street giants use private blockchains, retail investors may be excluded. But true decentralization does not require everyone to use a single open-source chain. Users will choose networks that are low-cost, secure, and easy to use. He notes that many national leaders need time to accept ‘giving up control over money or the financial sector.’
Derivatives, Liquidity, and Prediction Markets
CZ notes that perpetual futures were not invented by crypto (BitMEX launched in 2014), but Binance leads in liquidity and slippage due to its massive user base. CME's entry helps close the liquidity gap, benefiting consumers. He predicts foreign exchange trading will also migrate to blockchain. On prediction markets, CZ sees Polymarket and Kalshi as positive forces for price discovery, supported by the CFTC chair. Despite jurisdictional disputes, he believes they are good for the industry.
Yzi Labs Investment Strategy: 70% Crypto, 20% AI, 10% Biotech
CZ disclosed Yzi Labs' allocation: 70% crypto, 20% AI, 10% biotech, with a focus on impact rather than returns. Example: investing in a cancer cure that could save 100 million people even at a loss. Specific investments include an 'artificial womb' (tested in mice, human application 5-10 years away) and 'knee cartilage regeneration' using 3D-printed scaffolds (moving to next phase of human trials). CZ uses multiple AIs (OpenAI, Claude, DeepSeek) and finds US models more precise while Chinese models sometimes lack comprehensiveness. He warns that AI poses existential risks unlike crypto, requiring careful regulation.
Future Outlook: Crypto Won't Die; AI Will Drive Volume
CZ emphasizes that crypto will become a massive industry. Hot money flowing into AI actually brings new users to crypto (e.g., trading AI-related tokens). AI cannot use traditional payment systems (2FA, KYC), but blockchain's API-driven nature makes it AI-friendly. The future financial system will be built by AI, blockchain, and internet working together. Even if capital shifts to AI, it will eventually flow on-chain.
