- The crypto market's 2026 bear cycle can be tied to a number of factors, Binance founder Changpeng "CZ" Zhao said.
- Alternative investments like AI firms likely sucked away some of the funds that otherwise might have gone into crypto, but CZ told CoinDesk he expected this to be positive in the long-term.
- The U.S. Clarity Act failing to pass may not hurt the U.S. from a crypto regulatory standpoint, given other bills and the general advancement of crypto regulations worldwide, he said.
There is no easy answer to the question of why crypto markets have fallen so much in the first half of 2026, Binance founder Changpeng "CZ" Zhou said.
Geopolitical tensions, investors shifting funds to AI and the typical four-year crypto market cycle may all be contributing to the extended price decline in bitcoin BTC$60,519.65 and other cryptocurrencies, he told CoinDesk in an exclusive interview earlier this month. The world's largest cryptocurrency has been on a steady decline since last year, opening 2026 trading near $89,000 and climbing to just over $96,000 before falling to about $60,000, the level near which it trades at press time.
The numbers look even worse looking back 12 months; bitcoin — on which he said the strength of Binance is closely tied — hit an all-time high north of $126,000 last October, and is down some 50% since.
CZ said his long-term view is that the crypto industry will continue to grow, though that's not a totally selfless assessment. He said most of his net worth is wrapped up in the BNB token, meaning he does have a substantial stake in the health of the crypto market and the exchanges he founded, Binance and Binance.US. But CZ's assessment comes as someone who's been part of the crypto industry — and a key player in growing it — for more than a decade.
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"Over the long run, the industry will develop," he said. "There's going to be more and more demand for financial technologies, because there will be more and more transactions, so the industry will grow. So, I'm not worried about the industry or the short-term price fluctuations."
That "new industries like AI" were taking in the "hot money" from the crypto industry will be a positive fact in the long term, he said.
Similarly, CZ said the rapid growth of prediction markets as a tool that could provide price discovery and liquidity would be "good for the population."
"We can price things much more accurately and we can predict things more accurately," he said.
CZ acknowledged that there is a gambling component to prediction markets, but he said that is also true in other financial markets.
"With any financial instrument, there's always some speculators," he said. "The speculators actually provide the liquidity, so it's good that you have that speculation."
Policy futures
The U.S.'s potential signature crypto policy legislation — the Digital Asset Market Clarity Act (known as the Clarity Act) — may become a law by the end of the year if lawmakers can work out some remaining issues, including an ethics provision for government officials, chiefly the president.
But he said the Clarity Act and other individual bills are "sort of small, tactical things, which are really important, but those are not gonna impact the growth of crypto longer-term."
Even if the Clarity Act does not become law this year, CZ said he expected the U.S. would continue to take a leading role in crypto regulation, adding that other countries were continuing to introduce their own regulations governing digital assets.
The U.S. would likely still compete with other countries to introduce rules, and it already has the stablecoin-focused Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, he said.
"I, of course, hope to see it get passed, and then every other country will probably copy it to some extent," he said. "If it gets delayed … other countries may move forward first."
On the ethics front, CZ acknowledged that after the upcoming midterm election in the U.S., if Democrats retake at least one of the chambers of Congress, they will likely scrutinize President Donald Trump's pro-crypto stance and actions — including the pardons he gave to crypto executives. CZ was the recipient of one such pardon.
"I do hope that they realize that crypto is a very important industry for the U.S., and a lot of U.S. people have crypto," he said.
Read More: Post-prison CZ says time behind bars didn't hurt the billionaire's business after Binance
When asked if he'd be prepared for Democrats' potential new legal authority to compel him to cooperate, he said "there's nothing to hide."
"There will be more scrutiny, more inquiries, more clarity," he said. "We're very happy to provide information if they're seeking information."
Politics
He could be directly affected by the outcome of November's elections, but he said there's nothing he can do about the U.S. political climate, though he stated it during an interview in Washington, where he had set up meetings.
"I try to stay as far away from the U.S. politics as I can," he said. "This is a battle for the U.S. players to figure out. We will love to help you in some way, but I think there's a limit on how close we can get."
Other crypto leaders, such as Coinbase CEO Brian Armstrong and Ripple CEO Brad Garlinghouse, have been heavily involved in U.S. congressional elections, backing one of the country's largest political action committees, the Fairshake super PAC. But foreign nationals are banned from direct involvements in U.S. politics.
Though he said he's not involving himself in U.S. elections, CZ suggested a political sentiment that's been common among crypto leaders: Crypto enthusiasts will be consequential voters.
"Anybody who's anti-crypto now will probably lose quite a lot of votes," he said.
