Today, Changpeng Zhao, the CEO of a popular crypto exchange, Binance, has urged investors not to invest all funds on its planned token BNB. He has recently tweeted a picture of a discussion with a twitter user to support his point. The user has privately messaged Zhao, in which he stated his desire to put the entire funds on BNB. The CEO replied by suggesting the user not to put his entire life savings into BNB. He explained that it wouldn’t be wise to invest all money into a single coin since the market is extremely volatile. Zhao further advised the user to diversify his assets by keeping some non-crypto assets and BTC alongside BNB. While the CEO earned appreciation from some people for the suggestion, others simply ignored the advise.
The crypto market is extremely volatile and is the kind of market where profit and loss can happen within minutes. For example, Bitcoin has a value of $8,971, which is very low as compared to its all-time high of $20,000 gained in 2017. Therefore, it is beneficial for an investor to spread all his supplies on a single coin. Zhao stated that diversification is the safest way to bypass the pitfalls that appear within the crypto market.
Zhao also recommended to at least allocate supplies to BTC as he is much sure about growth in Bitcoin Cash value. By putting all his wealth in crypto, the CEO was still gambling that the value of Bitcoin and other virtual currencies that he probably holds would soar as it did when the last bull run occurred, and even the years before. However, he could surely bear any unexpected downtrend that could occur at any moment, although the cryptocurrency industry is still in an infant stage and sensitive to wild price fluctuations.