We probably don’t need to introduce Binance in detail to anyone in the cryptocurrency world. From the point of view of the volume of traded funds, it is the largest cryptocurrency exchange, and it seems that it does not mind the current bear market.
The founder of the exchange, Changpeng Zhao (CZ), says that they still have a lot of work ahead of them and emphasizes the need to build an increasingly stable and robust infrastructure. He also outlined the direction of their thinking and mentioned attractive crypto industries. According to the published information, the company could invest up to one billion dollars by the end of this year.
Binance is pouring money into crypto projects
The current cryptocurrency market is far from ideal. The world economy is weakening; unfortunately, even cryptocurrencies have not avoided significant price drops. Most investors are currently rather cautious and carefully consider the risk of each investment. Binance is one of the few companies in the market that ignores this logic-based trend and invests in new projects even more than in the past.
Binance mobile app running at smartphone screen with a trading page at background, Source: shutterstock.com
To many, this action might seem too dangerous. But Binance appears to know exactly what they are doing, and it’s a numbers game. Investing in many projects effectively diversifies the mentioned risk and can ultimately benefit from the current unfavourable situation. It is enough for them that only a certain small percentage of their investments will be successful, and this will reliably not only return all costs but quite likely will also bring huge profits.
Investments may exceed billion dollars
During the past year, Binance invested a total of $140 million in 73 projects. Most of them were somehow connected to expanding their infrastructure and various acquisitions of other companies. However, comparing these numbers with the current year, we will find that even brutal drops in cryptocurrency prices did not deter the company from increasing invested capital. In 2022, they have spent $325 million on 67 projects so far.
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Among other things, they plan to give $500 million to Elon Musk purchasing Twitter, and with the amount of $200 million, they participate in the well-known media company, Forbes. Changpeng Zhao (CZ) also noted that they would be interested in acquiring minority shares in traditional e-commerce and gaming companies in the coming months.
CZ: These industries are the most interesting
The competitive FTX exchange has chosen one of the popular investment (acquisition) approaches. It focuses mainly on buying shares in projects that, for some reason, do not work according to the owners’ expectations and are in financial problems. Binance is diametrically different, and their interest is more towards innovative industries.
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CZ prefers investing in DeFi and NFT. In DeFi, he sees opportunities primarily in payment transfer services, and with NFT, he emphasizes that it is far from just pictures of monkeys. In his opinion, NFT technology has extensive possibilities for real life, and he specifically mentioned digital tickets for various events or even NFT university degrees.
“Many of them [projects], they just take a user’s money and give it to somebody else. There’s not a lot of intrinsic value. In that case, what’s to acquire? We want to see real products that people use.”
Changpeng Zhao, Binance CEO
At Binance, they are clearly focused on finding real added value, which we can undoubtedly rate positively. This part of the business is handled by a team of 30 qualified investors worldwide who oversee acquisitions and mergers. Among other things, they currently have a huge investment fund with an investment capital of up to $7 billion.
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