[00:05] host Brian Sozzi and I have a special guest here, someone that I've I've and background for a while, but I've actually never seen him physically in me. He always would come remote. Changpeng Zhao, better known as CZ. I
[00:20] know him as CZ. Y'all who know and follow Bitcoin probably know him as CZ, >> Yes, absolutely. It's a great to be here. It's good to meet you in real >> [laughter] >> Likewise, likewise.
[00:32] first because that was the last conversation I had with you in November 2022. Since that time, of course, we've seen the crypto boom. It's become embraced by so many people, even regulators, too, finally, of
[00:45] course. Like, what is your thinking on the current state of play in crypto? >> I think there's actually a lot of parallels. Crypto goes in 4-year cycles. So, there's a lot of parallels between November 2022 versus now.
[00:57] November 2022, if I remember correctly, the Bitcoin price was about $16,000. post Actually, November is like right post the FTX crash. This is post Luna
[01:10] USD crash. That was in May 2022. It feels like yesterday. think the early November was the FTX crash. And in December, probably like, you know, right right on the bottom at that on that cycle. So,
[01:25] right now, we're in a like a what we call a bear market again. Bitcoin dropped to 60,000. So, there's quite a lot of similarities in in in in mood. But, if you look at the prices, you know, it's three still three, four x
[01:38] higher than than the last than 4 years ago. So, I'm pretty I'm pretty optimistic I'm still very optimistic about the industry, but we're going through a winter and but you know, the industry
[01:50] continue to grow. >> What causes these winters? >> I actually think it's just mass psychology. Humans, you know, we either we overreact. We either given a large population of people of
[02:04] masses, we either all rushing and then you well we create this like you know what do you call it bubble or however you call it and then when we panic. And then like we all sell. Like we we we overcorrect. So while the industry may
[02:17] be growing like like this, the prices fluctuate like that around around the value. So I think it's just my psychology. And There's many of things that are four-year cycles. Presidential elections
[02:30] are four-year cycles. Stock markets are either four or eight-year cycles. >> [laughter] >> I'm just kidding. >> Yeah stocks always go up because there's a lot of inflation. There's always more
[02:42] in circulation. If you look at the pure price of stocks. But also like you know economies grow. There's more companies that do bigger things etc. So yeah stock grows. But same thing applies to crypto. I think
[02:56] We're going to need more and more transactions and crypto blockchain is a new technology for money. It's not going to disappear. It's a technology. Yeah. >> At this stage in the game, what gets crypto out of a crypto winter?
[03:10] crypto out of a crypto winter? >> I think well there is always going to be continued innovation. There's cycles. The winter will always come and go. But the industry is growing. This winter now 60,000 we think is really low.
[03:23] Everyone's like panicking. But last win last winter four years ago was 16,000. so the industry is still growing. I think we just need more applications, more more use cases. And I think more and more use cases are
[03:37] coming. People are developing it. And also newer industries actually help the blockchain industry. Like everyone's really hot on AI. But right now today AI for like the cheapest ticket, the best ticket for us. But today it doesn't buy
[03:52] that ticket for us. Very soon you will. And when he can, um if if the AI companies want this transaction to work globally, supporting enable global adoption. >> Is that the next big unlock here you
[04:05] think for for crypto? Because for the past 2 years it was uh it's becoming more embraced by regulators. That was a catalyst. Well, think the whole industry is looking for this next big thing, this big moment. I
[04:18] You would know better than me, but or is it more incremental? Like, tech and that suddenly is the next hot thing. >> Um I think it's more incremental. Also, what people call the next thing, you know, DeFi was hot for a while, NFTs was
[04:33] was hot for a while. but, all of those things will come and they don't really go, they stay, but they they they become less hot. Um and I think
[04:46] when, but I I would assume it's in months, not not years. Um and also RWAs, real-world assets, tokenization of other assets, either financial or non-financial assets. That's growing much faster than I
[05:01] expected. So, a year and a half ago I thought just hype or not. But, now it's like it's a it's growing like a multi-billion dollar asset allocations, etc. And it's growing pretty quickly. So, I think RWAs
[05:16] will continue to grow and I was pretty excited about that. Um with seeing that now, you can trade AI company stocks using crypto globally. >> So, which company which which country doesn't want their stock to be traded
[05:28] globally by the global audience? Uh before, if you know, with SpaceX IPO, only Americans traded and a few institutions around the world can, but blockchain, you can reach the masses now. Uh so,
[05:41] and we've seen fairly significant trading volumes all of those things are happening. I'm pretty excited about RWA stablecoins, pretty excited about RWA stablecoins, AI AI AI AI commerce, AI payments.
[05:55] SpaceX IPO. As as someone who has has led a very large company in in Binance, has seen a lot of different market cycles, what do you think about the moment. And look, SpaceX is not alone. It's OpenAI potentially Anthropic coming
[06:10] >> Well, SpaceX is unique in the sense that it's not just an AI company. company. It's actually the largest internet service provider, right? service. >> It's It's fantastic. It's fast, it's
[06:25] cheap, it's reliable. It's just higher quality than like your cable. So, this is like this is 40 years after the internet, well, 30 30 40 years after the internet. So, you can still build a very strong internet like Starlink alone is a
[06:38] very valuable company, right? They somehow merged in XAI into it. And we We got merged twice. We We invested in the Twitter, and they got become X, become XAI, became SpaceX. So, we kind of indirectly got rolled into there,
[06:52] which we're very happy about. But, you know, the but it shows that you can still build a global ISP 30 years after the industry's matured. Right? So, like years ago, but now Starlink is really an ISP. It just does
[07:07] it very differently and it's from space. And then now with the AI, so I think like this one everything Elon does is really crazy out respect respectable. >> Can you imagine data centers in space?
[07:19] >> It's wild, but like he makes a lot of sense. Yeah, so it's [laughter] cool. Everything we do is very boring. world for the retail investor. And the retail investor has really
[07:33] cryptocurrencies. You know, they want to they want to be the early community to embrace this technology. How does this new this new supply of like these amazing tech companies SpaceX, OpenAI,
[07:45] like do you see that competing like with the demand to own crypto? >> Uh no, no, no, not not at all. I think this is great for so crypto is not its own industry. Just as like internet should not be its own
[07:59] industry. It's a technology. Crypto should not should be just a technology that that enhances financial financial tools, financial applications. So exist shouldn't be a tradify versus crypto kind of division.
[08:13] existing financial players institutions should use all the things that's happening in crypto. All the crypto guys should be traditional financial guys provide including like you know trading stocks
[08:28] including like you know loans all these financial tools. So it's just one technology that should be applied to a service and there's no division between crypto and tradify. In my opinion there shouldn't be. Right now is
[08:41] new players can tend to be lumped into crypto players, crypto platforms but they shouldn't be that that's a that's a that's a purely labeling division. for example if you look at crypto platforms like Binance they provide
[08:56] loans to people they provide savings programs they provide a lot of payments solutions. They provide like you know 40, 50 different kind of financial products to retail users around the
[09:09] world using the blockchain technology right? So there's no division. So I all merge together. >> Is there is there another I guess catalyst from a regulatory
[09:22] would like to see? >> Absolutely. I think well even today the days. You know US is still debating about the Clarity Act. Most other countries are still waiting for US you know they're still looking at the to
[09:36] to copy their homework. Um so we're still early. Um I think the crypto Um I think it's going to go on for multiple decades. It's probably going to take 50-70 years for things to mature. I can guarantee you that 70 years from now
[09:50] little nuance, that little nuance, about this new feature, new product. So it's going to like I think we still debate about crypto even security regulations quarterly anymore, yeah. >> Yeah, yeah. So so like no, this is what
[10:04] that's what like that's like a 90-year industry. So I think it will continue. need industries to mature and they slowly adjust to it. And they they're happens, there will something will there's new regulations to cover that so
[10:19] that it doesn't happen again. Um so um yeah, so I think it will continue to evolve. Um I think we just we're still pretty early. But now US is leading, which is great to see. Um and when US leads, everyone follows. So whereas um
[10:33] no problem, but if US leads the rest of the world may or may not follow. But when US leads, um it's it's good. It's now we have like we have um coherence. is great to see. >> How are the regulatory frameworks
[10:48] pulled ahead of some other countries? >> Um I think US there's way more >> There's a lot of a lot of news, which is good for for And
[11:02] US is more focused on like recently more Wait, I think there's almost a bit too much focus on stable coins. Um whereas other um countries are much more focused Um like say how do you tokenize national debt? National bonds? How do you
[11:17] these other countries are looking for ways to develop their economies. US is too, but US is really much more focused on the US dollar, interest rates, the banking sector. Um so US has a more developed financial
[11:31] sector, which is understandable. But I think US leads now. >> What side are you on? I'm sure you're team are you on? >> I don't really want I don't really pick
[11:45] a team. I'm a crypto guy, so I kind of want to be on the crypto crypto side. I think what's but I I want to be on the consumer side. So I think we should be give the maximum benefits to the anyone any business who wants to pass on the
[11:58] benefits to the consumers should be allowed to. Right? So that's the capitalist way. If a company like if if stable coins, me, I put it in the bank. I issue stable
[12:11] coin, I give it to you. This this money generates interest through the through business should be allowed to pass that interest to you. To the extent that you know the business stays afloat. And but again,
[12:25] I but I think this but that's a very simple simplistic understanding of it. I lot more. >> Maybe these two just just need to get in >> [laughter] >> set up a UFC right beside the White
[12:38] You put Brian Armstrong in there with >> [laughter] >> I would pay big money to watch it. As a financial media geek, I would pay big On the stable coin front, I'm glad you mentioned stable coin cuz every
[12:52] that I know is telling me about stable coin. Is the Is stable coin going to be that big to support everyone in doing something with stable coin? to be pretty big. Stable coin is really a new form of fiat money.
[13:12] >> Yeah, me too. >> [laughter] >> Like who would use a stable coin? But it did find a intermediary between fiat crypto and blockchain, right? Now Bitcoin back then were like it's highly
[13:24] volatile. Many people cannot use Bitcoin because of volatility. Many like and they march their profit margin may be only 10-20%. So, they cannot use a currency that fluctuates like 20% a day. Uh, whereas no, the stable coins fills
[13:40] solve the problem where in the early days banks did not want to work with crypto exchanges or crypto businesses, stable coins solve that problem. And also, uh, to wire money through banks, if you want to send money from a US bank
[13:53] to say, I don't know, bank in Singapore or bank in China, uh, if you want. It takes days and weeks and a lot of procedure. Uh, with stable coin on some one address, doesn't matter where where the receiving is in the world, it goes
[14:05] instantly. So, you does leverage the advantages of the blockchain technology. So, uh, and yeah, stable coin is that is it that big? If you look at the industry, the two big businesses sort of in the industry, uh, exchanges and
[14:17] coins are pretty big. And I think both businesses stable coins have not tapped the ceiling. Right? So, stable coin today is what? 200 billion maximum cap market cap. Uh, that's not that big in the grand scheme of things. Uh, I think
[14:32] thousand times, uh, a minimum. So, uh, so I yeah, so I then there's a lot of and then we're only talking about the US dollar stable coin. Uh, today that's 99 99% of the stable coins
[14:47] in the crypto industry. But it should be every currency should have their own of their own stable coin to see which one's good. And then they should all be transacting on chain. And when that happens and you you will happen, when
[15:00] that happens, not if, when that happens, uh, the FX rates will be determined 24/7 >> Um, so the FX markets will will will be will >> Yeah. >> Do crypto investors just need to stop
[15:15] following the likes of a Michael Saylor and every my night minute move he is making and just focus on the bigger picture. The bigger picture is are some about. >> Absolutely. Absolutely. So, I look, I
[15:27] think MicroStrategy is doing something really fantastic for crypto and he's >> He's good. But no, the guy sells 32 Bitcoins and Bitcoin crashes. >> Yeah. It doesn't It's like it it's it You shouldn't be reacting to something
[15:40] >> yeah. So, look, like no, at some point the guy has to like pay dividends, like what? Like 0.001% of what what he's holding. Um and first of all, we cannot associate we
[15:55] definitely definitively say that the market crash is related to that. It just the timing was coincidental. Um but yeah, I think the crypto market do um they're they they're a bit like this is mass Oh, sorry. I mentioned earlier,
[16:07] latch onto things and certain things just go viral and then everybody reacts. >> It's just human nature when it's just mass psychology. Uh so, it's you, which is look, we got to look at the bigger picture. The bigger picture
[16:21] will continue to grow. Uh to continue to grow. The AI economy is going to continue to grow. There's going to be a lot more demand for money uh for any financial tools. Um so, the
[16:34] and this is a new technology for for fintech. Um so, uh this industry is >> Given the amount of Bitcoin that that I strategy now I always try to call it MicroStrategy. Strategy now owns they
[16:48] are a systemic risk to the Bitcoin market if that doesn't work out like >> Uh no, I don't think so. Um I would just call it systematic uh they will have impact. So, um
[17:02] quickly, then you they will have impact on market price. But I think the market the market is pretty decentralized. Even if they hold I think that they're the they're around 1%, right? Um even if they hold 5 10%, the market will be able
[17:15] to absorb that. Um it's just like short term, yeah, there will be a market price impact. But that's opportunity for many investors who are who are long-term worry about the price, but whenever people's going to understand, no matter
[17:28] So, when you're selling at a low price, other people are buying. So, there >> Uh you recently wrote a book, right? Yeah. That was the other subject of this, too. What made you write that?
[17:41] >> Freedom of money, yeah, yeah, yeah. So, I was you know, I was bored when I was in prison. So, I started writing a book from prison. And then I just for me, I I thought it was long long
[17:53] which is relatively short. It felt long very long for me. Um but then I also thought that was a good turning point in my life. And then yeah, and then so I spent like almost a year and a half after I got out
[18:06] and it's published. I also think there's many um wrong narratives about negative narratives about crypto, blockchain, Binance, my CZ, the whole the whole the whole industry.
[18:20] Um and the book is really a very simple reading, very simple language. I cannot write I don't know fancy words. So, it's a very simple language in my in my true words, how how I saw the evolution of a crypto and my personal experiences. So,
[18:35] crypto, I think that's at least one view. I'm not a super early adopter, but you know, I got in around end of 2013. So, still relatively early when we look back now. So, I just wanted to share you know, our story with with
[18:51] >> Yeah, we were you know, Yahoo Finance was one of the know you. And you know, I like I told you before, I got to talk to you many times during the rise of Bitcoin to see like what you went through
[19:04] during that whole ordeal. It was it was hard for me to somebody I've talked to, I've gotten to know at least remotely, never physically seen him personally. Were you So, day one, you walk into
[19:17] differently because you of who you are? Like, what is that like? >> Uh yeah, so actually, luckily, I was not treated differently. I was treated just >> Which is great. I was really worried that they would recognize me and they
[19:29] the major news outlets, like, you know, the Wall Street Journal, Bloomberg, they reported like I was going to be I was going to be the richest person to ever to go to US prison. Uh and that didn't help me, right? So, at the time, my
[19:42] consultants, my lawyers were like, uh this is you're probably a primary target So, like, that psychological that psychological uncertainty was actually much, much heavier to deal with than the fiscal aspects. The fiscal aspect wasn't
[19:56] on the intake, you know, they check everything and they let you in. Um and >> Just like you see on TV. They check everything. They're they're >> The whole process or all. Yeah, yeah. So, like, yeah, so you go in and you're
[20:11] stripped naked. Um you show your tongue, show your ears, your balls, turn around, spread your butt cheeks, cough, the whole thing. Um and that's for every time when you have a visitor, too. Uh before and after
[20:26] >> It wasn't a one It wasn't a one-time thing. The first time you go through it, I was okay with it. Um you know, um but it's not a it's not a pleasant experience for anyone. Um and um
[20:38] also, like, for me, I'm the only person who ever went to US to to a prison for a Act, which is a registration failure. So, um but it is what it is. It's water under the bridge. Um I I concluded that chapter. Also, writing the books uh
[20:54] >> Like, therapeutic. >> It's kind of therapeutic. It kind of chapter. Yeah. >> How did you How did you survive day to day? How did you plan out your day? Cuz you I mean, I
[21:07] imagine it got around like, "Hey, look who's here." yeah, so people know I was like, no, the word the word of mouth passed I'm a rich guy. But, people are still polite.
[21:20] uh in prison, they put you in into a group with two or three other Asians plus like two Hawaiians,
[21:34] this little group. So, we were like a group of six out of this 200 people in this unit. And but once you're in the make friends everywhere. And other people don't don't didn't
[21:48] bother me. And everyone was friendly. Everyone So, in prison, everyone's a bit >> you fear for your life day-to-day? Like >> No, no. There was not I don't think at in, I was like a bit worried. I was really worried if there was any
[22:02] extortion attempts. But, once I got in, there wasn't. And I was in a small group. I didn't fear for my life. But, when they say four months, am I really going to get out in four months?
[22:16] getting out in four months. You >> There's a lot of uncertainties. There's a lot of people who because I'm not a US citizen, once technically once I finish my prison sentence, the standard procedure is to put give me to
[22:28] enforcement. >> Customs and Enforcement. >> Customs and Enforcement. And I heard stories of other inmates who go through ICE like who they spend a year in ICE detention center waiting for
[22:40] deportation. Like for me, I want to get out the minute I get out. But, the problem the the standard procedure is for for ICE to handle that. And but there's many many ways to to to sort of get not exceptions, just sort of
[22:53] that you that that that's optimal for you. For me, it's very very clear. I'm leaving the the minute I get out. So, but there's a lot of uncertainties. Uh the other uncertain uncertainty is
[23:05] um given how anti-crypto the last administration was when I was in prison, I don't know if they were going to uh you know, latch on some other charge um but that was uncertain to me. Uh so, there was a lot of up ups and downs. Um
[23:20] in my book. So, for anybody who wants to know about it. >> How did you How do you reacclimate to yourself or re-adjust
[23:32] >> So, interestingly, even with only 4 months in prison, it took me a few weeks or maybe a couple months once I got out to to to uh recalibrate. Um for the first couple of months, I
[23:46] just took a while to sort of slowly getting uh get used to it. Um and then, you know, um I look forward to see like what what can I do in my life? Uh what's don't want to go back, you know, running finance, etc. Like that's a you know,
[24:01] that's the last chapter. Um I just thought, you know, uh I I should do positive impact. And I wanted I want to be a situation when I'm 70, 80 years to be happy with myself. I want to say I I tried my best. Uh so, I cared less
[24:17] after I die. I just want to be happy with myself. Uh that I made a positive contribution to the maximum extent I can or to close to the maximum extent I can. >> How do you How do you imagine spending the next 25 years?
[24:32] >> of that mission ultimately. >> Sure. So, I think um uh uh investments is is is one way to do it. I think investing in impactful founders like the world-changing technologies, etc. Um and that has a very high degree of failure.
[24:45] fail, but hopefully we'll invest in a few of those that that will be extremely successful. Um and then the free education platform I'm work I'm working on uh Giga Academy, uh I think education is very fundamental. Um so this uh Giga
[24:59] is very fundamental. Um so this uh Giga Academy has 500,000 kids registered now. Um at the beginning of the year, 6 months ago, it was only 100,000. So, exponentially. So, that means there's a very strong demand for free education
[25:11] platforms. And then I spend the other time like I coach founders who wants the who wants to view me as a mentor. So, I have conversations with maybe a dozen, half a dozen founders at different times. And
[25:23] then I also advise a few governments on their crypto regulatory policies. Um so, for governments who wants to value my opinion, I'm happy to give my opinion. with you. I I thank you for coming down here and I look forward to uh let's not
[25:36] >> Absolutely. Like I I yeah. Thank you for having me. latest episode of Power Players. We'll talk to you soon.