CZ Binance foolishly celebrates crypto getting banned in India
As the price of SegWitCoin (BTC) steadily approaches its former glory (at $10,800 at the time of publishing), market enthusiasts are speculating when the public will take notice the price will go parabolic again. As traders are looking for an edge, a lot of eyes have turned to India, where the price is trading at a premium, as much as $500 higher than the average price worldwide.
Probably more as a cheerleading effort than anything else, Binance’s CEO Changpeng Zhao (CZ) tweeted about India’s situation specifically, noting that banned assets increase in value.
The more it is "banned", the more people want it. https://t.co/weOVZGCaz3
— CZ Binance (@cz_binance) June 22, 2019
The situation in India is particularly suited to driving up the price of an asset like BTC. As The Bitcoinist notes, price disparities can happen in worldwide cryptocurrency markets, and it can be exacerbated by several factors that India is currently experiencing. India is currently experiencing growing inflation and a bad debt situation, two factors that would encourage Indians to dump their rupees for digital currencies.
On top of that, the government is reportedly discussing banning digital currencies in an effort to protect the rupee. It is very likely that in a few months, it will be illegal for Indians to buy BTC.
CZ doesn’t understand the relationship between the situation on the ground and the desire for BTC, and his assessment that banning something makes it more desirable is flat wrong. Using another product that have been banned at one point in history, alcohol was popular before it was banned in the U.S., and although popular wisdom holds that prohibition didn’t work, studies have shown that alcohol consumption reduced considerably for decades after prohibition was repealed.
BTC isn’t alcohol, but we can follow a similar train of thought. If India, untrusting of a speculative asset with no real use like BTC, trains its public to believe it is a wasteful investment, and makes it entirely illegal for a period of time, it will hurt BTC long term, just as prohibition hurt alcohol consumption.
Because BTC, unfriendly to regulation and, in CZ’s case, celebratory of its bans, has driven India to consider banning all digital currencies, it will hurt the entire market long term, losing a billion potential adoptees for years.
This is par for the course when it comes to CZ though, as he regularly pushes for the short term profit rather than a long term vision. When Binance had to block U.S. users, CZ quietly recommended they get around the blocks with VPNs. He’s pushed for more coins on his platform, when all signs point to regulators wanting less, and only those of value. And he kicked Bitcoin SV (BSV) off his platform because he didn’t like the tweets of one man, a move which many speculated as because it threatened his empire.
CZ seems to get a thrill from running an exchange that offer potentially illegal activity, and it’s not strange to see him celebrating Indians potentially doing the same. Unfortunately, he doesn’t understand the long term repercussions of working against governments. If he had the wisdom to run a professional, law abiding business that valued real, useful assets, the crypto industry would be better off.
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