Bitcoin Falls as Investors Deleverage, Says Binance Chief
On Friday, Binance Chief Executive Richard Teng remarked that the notable drop in bitcoin over the past month was attributed to investors deleveraging their cryptocurrency holdings and showing risk aversion, a trend that aligns with observations across most major asset classes. Bitcoin, the leading cryptocurrency by market capitalization, has faced a downturn of 21.2 percent in November, accumulating a total loss of 23.2 percent over the last three months. As the year draws to a close, the chances of it finishing below $90,000 appear to be increasing. The drop comes after bitcoin hit a record high of over $126,000 in early October. “Similar to any asset class, various cycles and volatility are always present. What you’re seeing is not only happening to crypto prices,” Teng stated.
“At present, we are witnessing a notable level of risk aversion and deleveraging taking place.” Bitcoin has hit an all-time high as the ‘debasement’ trade fuels a risk rally. Global markets faced a significant sell-off this week, with investors expressing unease over an AI-driven valuation bubble and the potential for its impending collapse. Despite Nvidia Corp’s better-than-expected earnings, lingering concerns remain unaddressed. Teng highlighted that even with the recent downturn, bitcoin is still trading at over twice its value from 2024, a period marked by the entry of institutions like BlackRock into the crypto investment space.
“Over the past 1.5 years, the crypto sector has performed exceptionally well, so it’s not surprising that people do take profit,” Teng stated. “Any consolidation is actually healthy for the industry, allowing it to take a breather and find its feet.” Teng declined to provide insights regarding the possible comeback of Binance founder Changpeng Zhao to the exchange after receiving a pardon from U.S. President Donald Trump in October.
Zhao, a Canadian citizen with roots in China, encountered a hefty $50 million fine and endured nearly four months behind bars last year after acknowledging his guilt in violating U.S. money laundering regulations. Teng took over the role of chief executive from Zhao in 2023.
