CZ Attributes Crypto’s 2026 Slump to AI Boom, Global Tensions

There is no single factor behind the crypto market’s roughly 50% drop over the past year, according to Binance founder Changpeng “CZ” Zhao in an interview with CoinDesk.

CZ said the downturn in the first half of 2026 cannot be attributed to one cause alone. Instead, a combination of geopolitical tensions, capital rotating into artificial intelligence, and the industry’s typical four-year market cycle have all contributed to prolonged weakness in bitcoin and other digital assets.

Bitcoin, the largest cryptocurrency, has trended downward since last year. It began 2026 trading near $89,000, briefly climbed above $96,000, and has since fallen to around $60,000. Over a 12-month period, the decline appears even steeper—bitcoin reached an all-time high above $126,000 last October and is now down roughly 50%.

Despite the downturn, CZ remains optimistic about the long-term trajectory of the industry. He acknowledged that much of his personal wealth is tied to the BNB token, aligning his interests with the health of the broader crypto market and the exchanges he founded. Still, he emphasized that his perspective is shaped by more than a decade of experience in the sector.

“In the long run, the industry will continue to grow,” CZ said, noting that increasing global transactions will drive demand for financial technologies. He added that short-term price volatility does not concern him.

He also described the flow of capital into emerging sectors like artificial intelligence as a positive long-term development, suggesting it reflects broader innovation cycles rather than a permanent shift away from crypto.

On prediction markets, CZ said their rapid growth could enhance price discovery and liquidity, ultimately benefiting users. While acknowledging their speculative nature, he argued that speculation exists across all financial markets and plays a vital role in providing liquidity.

Looking at regulation, CZ commented on the potential passage of the Digital Asset Market Clarity Act in the U.S., which could become law by year-end if lawmakers resolve outstanding issues. However, he characterized such legislation as important but incremental, unlikely to determine the industry’s long-term growth.

Even if the bill is delayed, CZ expects the U.S. to remain a leader in crypto regulation, while other countries continue developing their own frameworks. He also pointed to existing efforts like the GENIUS Act focused on stablecoins.

On political dynamics, CZ noted that if Democrats regain control of part of Congress after the midterm elections, they may increase scrutiny of pro-crypto policies and figures, including former President Donald Trump. CZ himself was among those who received a presidential pardon.

He said he is open to cooperating with any investigations, emphasizing transparency and a willingness to provide information if requested.

Although he avoids direct involvement in U.S. politics, CZ acknowledged that election outcomes could impact the industry. He noted that other crypto leaders have been more active in supporting political initiatives, though foreign nationals are restricted from direct participation.

Still, he suggested that crypto users are becoming an influential voting bloc, warning that politicians who oppose the industry could risk losing significant support.

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