In an interview with CNBC on June 9, the CEO of Binance, Changpeng Zhao, shared some of his thoughts about leveraged products.
The CEO was asked what Binance does regarding the impact of leveraging products on people who do not necessarily know how to use them.
Zhao then stated that Binance makes sure that it only offers leveraged products in places where it is allowed. He also revealed that Binance is probably one of the only exchanges that offer a responsible trading program.
This program, for example, will ask certain explicit questions to an individual, and if the person answers the questions incorrectly, they are not allowed to use leveraged products. The trading program also ensures that if a person loses money on a leveraged product, that person will be prevented from trading for a certain amount of time.
Zhao was also asked if he thinks it would be better to just drop leveraged products considering people will almost certainly lose money on them and because it could lead to more stability. The CEO then replied that he does not think it is necessary.
According to Zhao, leveraged products do not only exist in the crypto market, but in traditional markets as well. He stated that leveraged products are also used for specific reasons like, for example, to provide liquidity, price discovery, and hedging, and leveraged products are considered by many to be a proven and valuable financial tool.
The CEO was also asked how long he thinks the current bear market will last, but he stated that he does not know at all. He did mention that these cycles usually happens every 4 years, but just because this happened in the past does not mean that the same can be said for the future.
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Source: Cryptocurrency - investing.com
