Will Binance CEO Changpeng “CZ” Zhao be the next Elon Musk for meme coins?
- The meme coin hype seems to have triggered this bullish chain of events.
- After a brief pause, Hong Kong’s new crypto regulation seems to have restarted this knock-on effect.
- Adding fuel to this fire was Binance CEO CZ, who tweeted that the crypto coverage by Chinese state media could trigger a bull run.
- But considering the larger macroeconomic outlook and Bitcoin’s current state, the bull run seems like a fading image.
From the launch of meme coins to Hong Kong’s recent regulation, crypto markets, or at least a specific set of the tokens, have experienced massive demand. Binance CEO Changpeng “CZ” Zhao took part in this mania after his recent retweet.
From crypto regulation to bull run: Timeline of recent events
April 16 - Meme coin PEPE launches and kickstarts meme coin mania in the coming days. Its market capitalization pushed from a few million to $567 million on May 1. As the FOMO and frenzy increased, the frog-themed meme coin’s market capitalization peaked at $1.8 billion on May 5. This move caused a bullish reaction in the larger crypto markets.
May 5 - Binance lists Floki Inu (FLOKI) and PEPE (PEPE). CZ comments in an AMA on the same day,
I personally never really understood meme coins. There are many successful people who do seem to understand them, including Elon Musk, and others, so we go by users. If a coin has a lot of users trading it, wanting it, playing with it, etc., then we’ll most likely list it.
May 22 - Chinese-related altcoins like Conflux (CFX), NEO (NEO), and Alchemy Pay (ACH) started to rally without any reason. In hindsight, this seemed like a pre-news event pump.
Read more: Top 5 Chinese cryptocurrencies to buy after Hong Kong welcomes crypto
May 23 - Hong Kong’s Securities and Futures Commission (SFC) welcomes crypto by allowing registered exchanges to offer cryptocurrency trading to retail investors.
Read more: Hong Kong leaves the door open to Ethereum killers Cardano, Solana, AVAX, MATIC and LINK
May 24 - China Central Television (CCTV) puts out a video mentioning the Solana-based meme coin - Samoyedcoin (SAMO) and its NFT.
BREAKING: CCTV (CHINA CENTRAL TELEVISION) FEATURED @solana MEMECOIN $SAMO (@samoyedcoin)’S NFTS AND QR CODE THAT LINKS TO ITS WEBSITE
— DEGEN NEWS ️ (@DegenerateNews) May 24, 2023
pic.twitter.com/yLGPhF7lQ6
Soon thereafter, Binance’s CZ retweets this video from CCTV, which triggered a reaction from crypto enthusiasts.
CCTV (China Central Television) just broadcasted crypto. It's a big deal. The Chinese speaking communities are buzzing. Historically, coverages like these led to bull runs.
— CZ Binance (@cz_binance) May 24, 2023
Not saying past predicts the future. And not financial advice.https://t.co/2wcArnPI93
Understanding market cycles and investor sentiment
Gauging investors' sentiment is key to identifying market trends. If done correctly, it can be used to identify cycle tops and bottoms. In the cryptocurrency space, one critical observation that has held true for the last two cycles is that meme coins or peak retail interest tend to trigger a bull run or mark its end.
Here are a few examples:
- December 18, 2017 - CME opens Bitcoin futures trading. This event marked the top of the 2015-2017 cycle.
- September 23, 2019 - Bakkt goes live after two delays and 13 months of questions. The hype causes Bitcoin price to tank 24% in the next three days and 62% in the next six months.
- May 8, 2021 - Bitcoin price crashes roughly 50% after Elon Musk hosts the Saturday Night Live (SNL) show.
On the contrary, meme coin rallies also tend to mark the start of a bull run. Shiba Inu price rallied 330% between October 4 and 7, while Bitcoin price rose 15% during the same period. This explosive move in the SHIB meme coin sparked an interest in users that sparked a bull run for the larger ecosystem.
Read more: Should you buy PEPE, DOGE, SHIB and other meme coins before April 20? Will Elon Musk come through?
Will CZ be the next Elon Musk for meme coins?
Tesla CEO Elon Musk was a key influencer in the 2021 bull run with an avid interest in meme coins. Musk named himself the Dogefather, and his tweets caused massive spikes in volatility and moved the markets.
But lately, Musk’s sway on the markets has declined drastically.
From the looks of it, Binance CEO CZ could be taking up the helm after the recent developments; retweet of CCTV’s footage mentioning SAMO meme coin and the listing of Floki Inu (FLOK) and PEPE (PEPE).
Unlike Musk, however, CZ is less reckless and more of a leader in the digital asset space. After FTX’s collapse, Binance CEO took it upon himself to represent the crypto community and launched proof-of-reserve, which eventually became an industry standard.
So to answer the question posed in the title, CZ could be the next Elon Musk for meme coins if he wanted to. But it is unlikely the CEO will be randomly tweeting pictures of Dogecoin, Shiba Inu or any other related meme coins.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
