Crypto pain period totem CZ returns. Can confidence and innovative vitality be restored?

Written by: flowie, ChainCatcher

After four months in prison, CZ is expected to return in a few hours. This Chinese entrepreneur has officially survived the first "calamity" that he had to go through in leading Binance to become a great global enterprise.

Looking back at November 22, which was recorded in history last year, the crypto market was once caught in a storm after CZ pleaded guilty and resigned as CEO of Binance and accepted a sky-high fine of more than 4 billion.

But with the admission of punishment by CZ and Binance, the era of cryptocurrencies has officially ended. Soon after, the US Bitcoin spot ETF and Ethereum ETF were passed one after another. The crypto upstarts used their money to compete for the right to speak in the US election, and cryptocurrencies are no longer niche.

In the nearly one year since CZ retired, Binance and the entire crypto market have gone from being a grassroots organization to strong compliance, and from a niche to the mainstream.

Under the leadership of He Yi and new CEO Richard Teng, Binance's business has developed steadily. In September, Binance's historical trading volume exceeded the 100 trillion US dollar mark for the first time.

But everything did not go as smoothly as expected. Faced with the ever-changing crypto market, Binance inevitably had strategic confusion and was caught in huge controversy due to its coin listing strategy.

The fate of Binance is a microcosm of the crypto industry. As the old and new cycles of cryptocurrencies alternate, hope and confusion are intertwined.

After the massive capital injection from Wall Street, Bitcoin once exceeded $70,000, but crypto innovation seemed to fail to keep up with the pace. All participants, including project parties, VCs and retail investors, failed to enjoy the overwhelming wealth like in the previous bull market cycle. This round of crypto bull market has therefore been criticized as a fake bull market.

At the beginning of the Fed's interest rate cut cycle, can the return of crypto totem CZ once again inject confidence and innovative vitality into the confused crypto market?

Binance is no longer a grass-roots, and crypto has entered the era of strong compliance

After CZ resigned, the heavy hammer on Binance regulation has not stopped. At the beginning of this year, Nigeria announced that Binance was suspected of conducting illegal financial transactions on its platform, and detained Binance executives Tigran Gambaryan and Nadeem Anjarwalla to date, accusing Binance of promoting the collapse of its own fiat currency.

However, under the pressure of successive supervision, Binance was forced to move from the grassroots to full compliance.

In addition to the CEO being replaced by Richard Teng, who has 30 years of experience in financial services and supervision, Binance also saw changes in many senior positions such as chief marketing officer, chief strategy officer, head of product, vice president of custody business, and vice president of compliance business.

Binance has invested unprecedented manpower and financial resources in compliance.

According to Bloomberg at the end of August, many of the 1,000 employees that Binance plans to recruit this year are concentrated in the field of compliance, and Binance's annual compliance expenditure has exceeded US$200 million.

Richard Teng also said that he plans to expand the compliance team to 700 people by the end of 2024, and the company is also continuing to strive to establish a global headquarters.

It's not just Binance. Under stronger regulatory pressure, other exchanges or head projects regard compliance as the most important development strategy. Hong Kong and other regions are also actively promoting the landing of compliant licensed exchanges.

The other side of the US regulation on Binance is that encryption has begun to merge into the mainstream.

On the one hand, Bitcoin spot ETF and Ethereum ETF were approved in early and mid-2024, respectively, and Wall Street forces have joined the game. Wall Street financial giants led by BlackRock are not only laying out assets such as Bitcoin and Ethereum, but are also trying out encryption innovations such as RWA.

On the other hand, under the heavy pressure of regulation, the crypto upstarts are no longer sitting still. They support candidates who are friendly to cryptocurrencies by providing campaign funds, which has influenced the attitude of American politicians towards crypto assets.

The amount of crypto donations in the 2024 US election far exceeds that of the previous election cycle, which has also created many famous scenes in which candidates such as Trump, Biden, and Harris played crypto cards. The 2024 Bitcoin Conference has also transformed from a technical forum to a political stage.

However, with the end of the wild era, more and more professional players in the traditional market, such as the first and second levels, have entered the gold-digging team, and the way of playing crypto is also changing. Binance and even the crypto market are inevitably in a period of pain.

Binance's controversy, crypto confusion

Compared to the sky-high fine of more than $4 billion, the crypto community was more concerned about the impact of CZ's departure on the future development of Binance. But it turns out that Binance, under the leadership of another co-founder and CZ's wife He Yi, and the new CEO Richard Teng, still maintains a strong position.

It still holds the top spot in terms of trading volume and user scale. According to CoinGecko data, Binance's 24-hour trading volume exceeds 17 billion US dollars, and its monthly visits exceed 53 million. CoinGecko's second quarter report shows that Binance's market share in Q2 is about 44%, which is slightly lower than the same period last year, but still ranks first.

He Yi's attribute of "Binance's largest customer service" was also fully demonstrated during CZ's departure. Compared with the CZ period, Binance directly faced public opinion and provided answers to almost every key point of market doubts, and contributed many inspiring crypto essays to the crypto market.

But in the past year, Binance's controversy has never stopped. In terms of business strategy, at the end of last year, the explosion of Bitcoin ecological inscriptions involved a number of CEXs in the battle for traffic and Web3 wallets.

Faced with new things that are changing rapidly, He Yi revealed in the AMA that it is difficult for Binance to judge the future popularity, resulting in insufficient investment. Binance has also been questioned for not entering the market faster and the Web3 wallet experience not meeting expectations.

In addition to business strategy, the biggest controversy faced by Binance in the year when CZ left office was more about listing coins.

From girlfriend coins, VC coins to meme coins, Binance has been caught in the whirlpool of public opinion many times. He Yi responded to the debate on listing coins at least 5 times through short essays or AMM.

Girlfriend coins can be said to be a legacy of the CZ era. But this year, Binance was questioned by VC coins and meme coins, exposing the collective confusion of Binance and even the crypto market.

Money is not so easy to make, and the crypto narrative has begun to de-bubble.

VC coins have driven the popularity of high FDV and low circulation tokens this year. These tokens are generally weak in price after TGE. According to the statistics of crypto KOL @Ryanqyz_hodl, most of the tokens listed on Binance in 2024 have all fallen sharply after TGE.

Data source: @Ryanqyz_hodl

Whether it is VC coins, TON games, or memes, projects have gone to an extreme, all for the purpose of listing on Binance.

But users can't make money, so they can't avoid criticizing Binance. Binance then took the lead in adjusting its listing strategy, which also caused collective reflection in the crypto market. The crypto community generally realized at this time that the crypto industry was caught in a vicious cycle of creating unreal stories and only wanting to sell coins.

Therefore, although the public opinion on high FDV tokens has subsided, Binance may have recently launched meme tokens in succession due to the competition for traffic, which has caused controversy again. Although memes are good, they cannot be just memes. When can the crypto market move from the PVP (mutual cutting) model to the PPP (mutual assistance) model?

Everyone misses the CZ era, but history is moving forward

When Binance and even the entire crypto market were in controversy and confusion, the Federal Reserve announced a rate cut. CZ's return may inject new confidence and vitality into the crypto market. Before CZ was released from prison, the activity of the BNB chain and the CZ release concept meme coin can be seen.

Although CZ is still prohibited from participating in the operation or management of Binance's daily business, the founder who has dominated Binance's 7-year glorious history is still Binance's largest shareholder and has influence on Binance's future.

CZ's influence is not limited to Binance. In addition to the new impact of Binance itself on crypto after CZ's return, CZ itself, as one of the crypto totems, may also bring highlights to the new crypto cycle with its global vision and experience in cycles.

However, Binance and even the crypto market after CZ's return are also facing many tests. The crypto cycle has changed, and the logic and gameplay are also changing.

When CZ led Binance from a workshop to the world's largest crypto exchange, it was also the period of the fastest growth of crypto. Perhaps everyone misses the myth of wealth of 100x and 1,000x coins brought by innovative IEO and other models in the CZ era. But as He Yi lamented in his new article "If We Have Different Opinions, You May Be Right", this is more of a double blessing of the early niche market and the macro economy.

In the year when CZ retired, the crypto industry has come to a new critical juncture.

He Yi has always said that the global economy has entered a new cycle, consumption has been downgraded around the world, and more traditional players have joined the gold digging team. After the transaction scale of traditional financial products related to cryptocurrencies has steadily expanded, although it is indeed big, the way it comes is not the same as the way everyone imagines that capital will take over without thinking.

In addition, crypto innovation still faces balance and even compromise under the trend of compliance. Binance and the entire crypto market have to endure a more complex environment on the road to stability, innovation and growth. The hundredfold and thousandfold growth in the CZ era may be more difficult to reproduce.

But the other side of the coin is that after the bubble of only telling stories and selling coins is punctured, encryption may not only be about technology, but return to the essence of business and value-driven. Blockchain technology may gradually be based on serving the real needs of most people and enter the homes of ordinary people.

With the return of CZ, we look forward to Binance's continued stability and change, and also look forward to the rolling forward of encryption.