Key Takeaways
- Binance founder Changpeng Zhao has shared three must-ask questions for crypto investors managing crypto risk.
- CZ warns that investors need to understand worst-case scenarios, retry limits, and their knowledge.
- Fresh off a prison sentence, CZ seeks a Trump pardon and eyes a strategic comeback.
Binance founder Changpeng Zhao, better known in the crypto world simply as CZ, has offered advice for crypto investors. CZ offered a three-question crypto risk test on investing in digital assets.
In a post on his social media X handle, Changpeng Zhao laid out three questions he believes every crypto investor should ask themselves before making their next move. While the questions may look easy at the outset, they may not necessarily be simple, but thinking about them could change how every crypto enthusiast thinks about risk altogether.
Approach to Managing Risk
CZ shared his approach to managing risk in three straightforward questions:
1. Ask: What is the worst-case scenario? If it goes to 0, can you survive? Keep your lifestyle?
2. How many times can you afford to try?
3. Do you know/understand what you are doing? If not, read/learn.
Changpeng Zhao’s 3-question crypto risk test comes as the market embraces new optimism caused by growing interest from formerly conservative institutions and the launch of several U.S.-approved Bitcoin ETFs, both of which are opening new access points for investors. While he may no longer be at the helm of Binance, the former CEO has continued to play an integral role in the cryptocurrency industry.
Investing in Decentralized Technologies
After stepping down as Binance CEO following a four-month jail term, CZ seems to have shifted his focus towards mentoring startup founders, investing in decentralized technologies, and helping build educational resources for the industry. Zhao recently predicted that Bitcoin could soon hit between $500,000 and $1 million during the present market cycle, though he has not offered a specific timeline.
Apart from his Bitcoin prediction, Changpeng Zhao acknowledges that most speculative assets, especially meme coins, were unlikely to hold long-term value. However, he states his belief that there is potential in artificial intelligence, decentralized finance, and real-world asset tokenization.
Conclusion
A few months after finishing his prison sentence for violating US anti-money laundering laws, Changpeng Zhao is again returning to the limelight. After officially filing for a presidential pardon from Donald Trump, he seems set to reclaim his position in an industry he helped shape, with the 3-question crypto risk test to investors as an example of his attempt at getting back what he lost. Zhao’s legal troubles led to Binance’s $4.3 billion settlement and his exit as CEO. But behind the scenes, he’s pivoted to mentoring, investing, and championing decentralized innovation.
Frequently Asked Questions
What is interesting about Changpeng Zhao?
CZ, the co-founder and former CEO of Binance, was forced to resign as the CEO in November 2023 after pleading guilty to a money laundering charge in the United States and was sentenced to four months in prison in April 2024. He served the sentence, and it was by September of the same year.
How did Changpeng Zhao make money?
CZ is thought to be the wealthiest man in cryptocurrency today. He is said to have been inspired by a chance encounter at a poker table to sell his home and invest in Bitcoin, ultimately creating Binance.
How much of Binance does Changpeng Zhao own?
Based on public statements and filings in regions where ownership is publicly disclosed, Zhao is credited with 90% of Binance.
