He crypto world is in suspense. A few hours until the halving happens-halving the reward miners receive for mining and validating transactions that occur on the blockchain-the price of Bitcoin (BTC) retreated vehemently after reaching a new all-time high.
In that context, Scope spoke exclusively with Min Linregional vice president of Binance for Latin America, in order to try to clear up some doubts about the halving, the impact of high interest rates in the US, the possible scenarios for the US economy and about the plans of the largest exchange in the world for the remainder of 2024 .
To begin with, the stage most favorable for the crypto market would be one in which the Federal Reserve adopts a neutral or slightly bearish stance, keeping interest rates stable or even reducing them slightly. In this scenario, combined with the halving the BTC which reduces the supply of the cryptocurrency, a significant increase in the price of Bitcoin, as well as altcoins, could be expected.
On the other hand, the liquidity provided by Bitcoin ETFs could also contribute to this rally. A “soft landing” of the US economy, in which the Fed manages to reduce inflation without generating a deep recession, could be positive for the crypto market in the medium term. Investors could take risks again, driving demand for assets like Bitcoin. On the contrary, a “hard landing” scenario, with a severe recession, could have a negative impact on the short crypto market, as investors could turn towards safe haven assets such as gold and the dollar, which could cause a drop in the price of Bitcoin and altcoins. But let’s see what it says Min Lin.
Journalist: In the previous From the halving, what can be expected with the price of Bitcoin and altcoins?
Min Lin: While Binance does not comment on market variations or make recommendations on any type of investment, we can note that we see more and more people entering the crypto space in the context of various factors, including macroeconomic cycles and industry trends, which They can influence how investors feel about some assets, impacting prices.
Q: How about ETFs?
M.L.: The recent approval of Bitcoin ETFs in the United States has generated growing optimism in recent months, as 11 of the country’s most recognized asset managers can now offer Bitcoin to their clients through ETFs (Exchange Traded Funds) or exchange-traded funds. These instruments allow investors to access cryptocurrencies without needing to directly handle digital assets. Following the launch of these products, in recent months, Bitcoin has experienced significant growth related to the liquidity that comes from this new institutional segment and this has been reflected in the price movement.
Q: Would it be how to turbocharge Bitcoin before the halving?
M.L.: Investors also know that “Bitcoin Halving” is near, an event that occurs every four years, and which halves the reward for mining new blocks, thus reducing the supply of new Bitcoins. Since Bitcoin is an asset with a fixed maximum supply (21M), and Halving reduces the rate at which new Bitcoins are created by 50%, basic economics would dictate that a price increase is the natural next step. The Halving essentially creates scarcity for Bitcoin, and further reinforces the narrative of Bitcoin as digital gold. Historically, BTC has seen notable price rallies in the six months following each halving event. These price rallies underscore the market’s response to the reduced supply of new Bitcoins, with elevated demand often boosting the value of the cryptocurrency. Although past performance is not indicative of future results, these historical trends provide insight into the potential impact of halving events on Bitcoin price dynamics.
P.: How is Binance addressing scalability and transaction time issues on its platform, especially during periods of high demand?
M.L.: Binance religiously follows three very simple rules: keep user assets in 1:1 escrow (one Bitcoin for one Bitcoin, one Dogecoin for one Dogecoin), never trade against your users, and have no debt in our capital structure. . Binance does not own or operate any entity that engages in trading activities against users nor does it use escrow assets for any purpose other than as requested by specific users under the terms of certain products such as savings and staking products. . On the other hand, Binance continues to demonstrate that we hold user assets 1:1 and have strong liquidity, so we have no problems funding customer withdrawals.
Q: What are Binance’s plans to improve platform security and protect user funds?
M.L.: As industry leaders and owners of a fully user-focused culture, Binance goes beyond standards to put users first. We have invested heavily in compliance and security around the world, and continue to do so, in line with regulatory requirements around the world. Over the past two years, we have made significant efforts and investments in third-party partners, including KYC providers, transaction monitoring, market surveillance and investigation tools that support our compliance programs. In this nascent and rapidly growing industry, we are rapidly evolving to ensure the highest standard of regulatory compliance as the space continues to mature and as we continue to evolve alongside other players and regulators.
Q: What are the projects and developments that Binance has underway to improve the user experience and expand its service offering?
M.L.: Binance is focused on improving the user experience and expanding its services in Latin America. To this end, it has developed products such as Crypto Remittances, an internal solution that allows users in 9 countries in the region to transfer crypto funds to bank accounts in an easier, faster and more profitable way. Additionally, Binance Pay continues to expand its benefits for individuals and merchants, reducing costs, times and intermediaries in crypto transactions. Over the past year, Binance Pay has experienced significant growth in transaction volume and active users in Latin America. The platform continues to work on new partnerships in the region to expand crypto use cases and promote global financial inclusion through cryptocurrencies.
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Q: What strategies does Binance have to encourage mass adoption of cryptocurrencies and educate users about their responsible use?
M.L.: Nowadays, knowledge about crypto and blockchain is essential. Binance has always been committed to crypto education, providing access to completely free resources and services. In addition, it supports several key initiatives that have benefited millions of people around the world, including Binance Academy, an educational platform, founded in 2018, that offers more than 1,000 articles, glossary entries and advanced courses, for all levels of knowledge, completely free and available in more than 20 languages. These initiatives are not only aimed at crypto traders and investors. We also work with governments, regulators, legislators and decision makers, social leaders and people interested in this world, to develop their understanding of technology.
Q: How is Binance addressing concerns about centralization and decentralization in its business model and products and services?
M.L.: Centralized exchanges offer benefits such as ease of use, high liquidity, and the ability to handle large transaction volumes. In addition, they provide advanced trading tools and customer support, making it easier to enter the crypto world. Binance launched its Web 3 Wallet, a self-custodial wallet that allows users to explore Web3 easily, conveniently and securely. Designed with user experience as a priority, it seeks to make Web3 more accessible and easier, reducing barriers to self-custody of assets and acting as a bridge to DeFi. The goal is for users to be able to explore Web3 in a comfortable and safe environment.
