CZ and Cathie Wood’s First Livestream: CEOs Who Don’t Understand Blockchain Will Be Left Behind; BTC Will Break the Four-Year Cycle in 2026

Original link: ARK INVEST: From Binance To Beyond: CZ Predicts Crypto’s Next Phase

Compiled by: CryptoLeo (@LeoAndCrypto)

CZ and Cathie Wood (“Woodie”) don’t have many intersections, but each time they do, it sends ripples through the industry. Their only existing link is based on the crypto industry: Woodie has been a long-term Bitcoin bull, with her Ark Invest publishing multiple reports evaluating Bitcoin’s future prospects; CZ is the founder of the industry’s leading exchange and also holds a long-term optimistic view on Bitcoin.

Recently, CZ connected with Woodie for the first time on Ark Invest’s FYI podcast (click to watch). CZ shared insights on his journey with Binance and his views on the crypto industry; Woodie also recommended CZ’s new book, “The Binance Life,” to the audience, calling his story inspiring. Additionally, at the end of the podcast, Woodie referenced the "1011" market event, clarifying that it was not triggered by Binance but by tariff-related panic. Below is a concise summary by Odaily.

Traditional Finance Boosts Bitcoin, AI, Stablecoins, and Tokenization

Cathie Wood: What areas have developed slower or faster than you expected?

CZ: First, I expected crypto payments to have taken off by now, but they haven’t. Most people aren’t using crypto for payments, and many merchants don't realize how convenient crypto payments are — it works just like Visa or Mastercard.

Over the past year, institutional participation in crypto in the US has been surprisingly fast. The Biden administration hindered crypto innovation, with many builders from major crypto projects being sued by the SEC, leading people to turn to meme coins while few truly useful applications were developed. However, I don't think crypto development is in a vacuum right now; it’s just much slower than I anticipated. I hope pro-crypto regulations in the US pass quickly so we can see more of this development and innovation.

Many things have deviated from my expectations, but over time, we will fill the gaps and continue to move forward.

Secondly, the rise of stablecoins and the popularity of AI agents are noteworthy. I believe AI will help in several ways. First, AI agents trade at a much higher volume than humans, and they use crypto. They won’t use traditional financial systems for payments; crypto is more convenient. Additionally, I think AI will accelerate development speed. AI coding can dramatically speed up writing code, though it’s not fully automated yet (it might be soon). AI can also help people build applications faster, like more user-friendly wallets, more secure wallets, and faster chains.

The development of stablecoins has also exceeded my expectations. Back in 2014 when Tether was just starting, and even until 2017 when Binance listed USDT, I viewed stablecoins as a temporary measure for holding fiat-pegged value during market downturns. Another interesting thing: I didn’t expect gold trading to become so active in the crypto space. Binance only listed a gold token about two months ago, and now it has become the largest gold trading venue outside traditional markets, with gold accounting for up to 10% of futures trading volume. Crazy! And Binance recently launched oil trading. We’re seeing the integration of traditional assets with crypto, a trend initially rooted in the tokenization of assets like stocks, often discussed by the industry.

Cathie Wood: Larry Fink foresaw asset tokenization about two or three years ago, which also provided ideas for traditional finance. (Even during the Biden administration) Why have these traditional assets gained such substantial volume in the crypto space in such a short time?

CZ: I think Larry definitely has his own network, especially in traditional financial markets. Larry's message is seen as primary by global leaders, other financial institutions, and traditional institutional investors; he has established connections with global leaders. Additionally, he is forward-thinking, believing everything will be tokenized, with sufficient trading volume. Frankly, even though I worked in traditional finance before, I don’t understand the money market as deeply as Larry does. I’m more of a tech guy. His understanding of the industry and his support have been a huge boost to asset tokenization. What I didn’t expect is that Binance now has over 300 million users, and they actually have real demand. As I mentioned earlier, the crypto space is currently lacking quality assets. Not many good projects have emerged in the past four years, so people are left to trade meme coins. But that’s just one category. Now that tokenized assets like gold and oil are available for global crypto investors to trade – due to geopolitical tensions, asset volatility is high – the trading volume for quality assets like gold and oil will increase. It’s just a matter of time.

Cathie Wood: Do you think traditional finance is embracing crypto because they believe it will reduce costs and eliminate friction? Or are they embracing it because they see this technology will stimulate more financial activity?

CZ: Great question. I think they see the potential of crypto. The trading volumes on Binance or other crypto exchanges/chains are huge; the potential is massive, so they have to catch the trend. On the other hand, this new technology also reduces fees and costs. So, in the short term, their profits might decrease, but trading volumes will increase. Ideally, if you reduce fees by 50%, your volume could double, quintuple, or even multiply by ten. As the technology evolves, fees will get lower and lower. If you don’t lower fees, you lose market share. Traditional finance has realized this, and it’s another factor driving their rush to adopt crypto: charge clients less, attract more clients.

Cathie Wood: Yes, typically during periods of technology-driven disruption, the traditional world fights it. But now they seem to be embracing the new technology. Perhaps, as you say, not doing so means losing significant market share. But comparatively, crypto-native players are more likely to be winners because they aren’t as constrained. What do you think?

CZ: I think there’s a very delicate balance. Some CEOs of large traditional finance companies might think, “I won’t be at this company for long; maintaining the status quo is fine.” They just want to do their job well. But the next CEO might think, “I’ll be here for five or ten years; I hope the company can take a long-term view.” Also, publicly listed companies often have a short time window, needing to report earnings quarterly. So, there’s always a balance between short-term and long-term thinking. But if a company focuses solely on the short term without a long-term strategy, they will lose out.

As you said, native crypto companies don’t have that burden; they are startups. They adopt innovative strategies. Private companies usually have a longer-term vision than public companies. So, adopting crypto might disadvantage public companies in the short term, but in the long run, the trend of crypto adoption will continue. Whoever adopts better technology that saves costs and improves efficiency will win; those who don’t will suffer negative consequences. So, even if a CEO of a large traditional finance company doesn’t change in the next two years, they will eventually lose a lot of business and be forced to change.

Blockchain technology and AI are rapidly converging, and AI is developing faster than any other technology we’ve seen before, providing faster feedback. A CEO might think, “If I don’t use AI and blockchain, I might get fired within a year.” In the internet age, if a CIO of a financial company didn’t consider cloud computing, they’d be fired. If a CTO doesn’t consider AI, they’ll be fired soon. If a CEO doesn’t consider blockchain, they might be phased out too. Perhaps we will soon reach that stage.

Everything Exchange: Stay Open, Embrace All Integrations

Cathie Wood: Regarding Binance, there are so many competitors with vast resources. I’m curious how you’ve managed to stay number one in the industry for so many years?

CZ: For several different reasons. First, we always prioritize protecting users above our profits. So whenever an emergency occurs, our first instinct is to protect users. Users know this. Second, we’ve been lucky with our broader operational coverage. Over the past decade, regulatory uncertainty has been severe. Some exchanges are somewhat constrained by their host country. If that country supports crypto, they do well; if it opposes crypto, they don’t do as well.

Binance goes where there is support. Binance attracts a small portion of users from each country or crypto-friendly nation. Collectively, these users form a huge number, and a large number means the best liquidity. When you have the best liquidity, users choose you, leading to a network effect. So far, we’ve kept company costs very low. Binance has several offices, all small, and we don’t waste much money. Working from home also keeps our costs low, and I truly hope Binance retains that startup feel, even though it’s now a large team.

Furthermore, there’s a trust issue in the crypto industry, especially for CEXs. We’ve been number one for a long time, with huge trading volumes, and we’ve always been very secure, which builds trust. Some similar companies in the US have high costs and high fees, but US users have little choice but to use those platforms, creating almost a monopoly in their own market. I think the US should open up to global competition; prices would come down. Consumers would have more choices, which would also increase crypto penetration in the US, benefiting current US companies.

Cathie Wood: How do you see the future of crypto exchanges like Binance and Coinbase? We discussed other asset classes coming on-chain. Do you think the “everything exchange” we often hear about, like Coinbase, will truly trade all asset classes? For instance, prediction markets like Kalshi and Polymarket are emerging. How do you see the future development of these exchanges?

CZ: The industry might evolve in several different ways. Everyone wants to be an everything exchange trading everything. This will largely happen. Binance now trades oil and gold, something I wouldn’t have dared to think about a year ago. Coinbase will likely do the same, followed by other exchanges. Binance has also recently integrated with prediction markets. I believe other exchanges will do similar things; some might even launch their own prediction markets if they get the license.

With new technology, one platform can’t exclude middle players entirely. You don’t need that many different platforms. We don’t like the word “centralized,” but this is centralization, driven by network effects. At the same time, geographical and user differences exist. For example, non-technical users entering the crypto space might prefer CEXs over DEXs. But, once the technology becomes more advanced and tools for self-custody wallets become easier and safer for ordinary (non-tech) people, they might shift to DEXs. So, it depends on which side develops faster. If 10% or 20% of the global population suddenly turns to crypto, CEXs will scale up quickly, while DEXs might stay stable for a while. But if people gradually move towards DEXs, we might see DEXs develop faster than CEXs. Currently, using a DEX still requires handling wallets, addresses, etc., which might be complex for some. Most non-technical users don’t want to deal with that. So, it’s hard to say which direction it will go.

I think with the SEC declaring a positive and encouraging regulatory stance towards DEXs, the US might relax policy and trading categories. The CFTC also seems very supportive of the derivatives market.

Exchanges need to think about how to integrate with this or just launch their own derivatives markets. I think all of this might happen. The US currently has a regulatory policy advantage, and we might see exchanges in one region grow faster than the rest of the world under favorable regulations. It’s hard to say. For Binance, I encourage them to keep an open mind and be open to everything everywhere.

Coinbase has a great opportunity. You invested in Coinbase, and they’ve done exceptionally well over the past 14 or 15 years, weathering all the regulatory issues in the US. I think multiple exchanges will continue to exist for a long time.

Stablecoin Landscape May See a Proliferation of Players

Cathie Wood: Regarding regulation and the US, we are still waiting for more clarity, especially concerning stablecoin yield. What are your thoughts on this? I know you and Tether, or Binance and Tether, have had a very close relationship for years. We know Tether is unlikely to offer interest in the short term. How do you see this situation?

CZ: A small correction here. Binance and Tether actually have no relationship. Binance simply listed USDT early on, which helped Tether grow. We have no business relationship, no equity, no revenue sharing, not even a commercial contract.

Personally, I believe stablecoins should yield returns for users, but Tether won’t do that in the short term. As the early stablecoin giant, they have a dominant position even without doing so. However, they also leave room for competition, as other emerging stablecoins are offering yields.

Regarding stablecoin yield, there are different ways to do this. I don’t think the argument that stablecoins “can’t provide benefits to users” makes sense right now. Regulations might say stablecoins can’t offer direct interest, but people will find other ways. There have been discussions, like activity-based rewards. You can set up different types of accounts, different activities, different staking methods. There are always many different ways to pay people yields. If you’re a business wanting to reward users, there are many ways to do it.

I don’t know how to completely restrict yield. A business offering zero-fee trading is, in a way, providing benefits to users. At the same time, I realize we want to integrate with traditional finance, but we don’t want to completely destroy or disrupt them. So we need to give them time to react and decide on regulation.

But soon, in the US or elsewhere, there will be a stablecoin that offers good yields for users while also being convenient for trading. That stablecoin will win. Currently, Tether dominates, but USDC is not small either, and USD1 is growing quite fast. We also see other stablecoins outside the US growing quickly. So, I think the stablecoin field is a crucial part of crypto. Whether it’s low fees, user rewards, or any business that can offer better returns to users, they have a significant advantage. Competition will be intense. If the US doesn’t allow stablecoin yield, international stablecoins might stand out in the short term.

Cathie Wood: Interesting. I’ve discussed this before – for instance, the fear that institutional deposits might flow into stablecoins. Do you think this concern is reasonable, or is it more like banks spreading fear?

CZ: I think there is some rationality to this concern. On one hand, we just put assets in a relatively safe place that generates interest; that’s one way. But once you go down the interest rate path, people will demand higher rates, and the way to raise rates is to put assets into riskier investments. Compared to banks, which operate on a fractional reserve system, banks invest a lot of money elsewhere, which they might not be able to recover in time. So, a bank run is very scary for a bank.

So far, crypto exchanges and even stablecoin issuers mostly maintain a 1:1 reserve of customer funds, and some top exchanges are undergoing audits. So, my personal view is that we shouldn’t break this tradition in crypto; it’s worth preserving. This situation doesn’t exist in the traditional financial industry. Crypto exchanges and stablecoin issuers should maintain a 1:1 peg and 100% reserves. Of course, they can also generate returns through other means. For the returns we generate, if the law permits, I actually encourage companies to pass them on to users. Globally, it’s very likely that more people will use these stablecoins, unless they are banned from holding them. Fundamentally, users consider rewards, economic benefits, ease of use, and security when choosing a stablecoin.

Cathie Wood: When it comes to the stablecoin and crypto ecosystem, is there a conflict? Is it a situation where only a few large stablecoin issuers can win? You mentioned earlier that in the early stages, we will see many stablecoins. What do you think the final outcome will be? Winner-takes-all or the opposite?

CZ: It might be winner-takes-all. But in the short term, we will see more competition rather than consolidation. Historically, issuing a stablecoin has been quite difficult. Before the Trump administration, governments globally were quite hostile towards crypto. For years, whenever Tether disclosed its bank account, that account would be shut down. So, for Tether to maintain a bank account with substantial assets while the US government was trying to shut them down, it was like a very difficult skill to master. I still don’t know how they did it; maybe that’s why they are so large. Now, I think