CZ Blames 4-Year Cycle, AI Surge for Crypto’s 2026 Struggles

Binance founder Changpeng “CZ” Zhao said the crypto market’s roughly 50% drop over the past year stems from a mix of factors rather than a single cause.

In an interview with CoinDesk, CZ pointed to geopolitical tensions, a shift of investor capital into artificial intelligence, and the industry’s recurring four-year cycle as key reasons behind the extended weakness in 2026.

Bitcoin has been declining since last year, starting 2026 near $89,000, briefly rising above $96,000, and then falling back to around $60,000. On a year-over-year basis, the losses are even sharper, with bitcoin down about 50% from its peak above $126,000 last October.

Despite the downturn, CZ remains confident in the sector’s long-term growth. He acknowledged that much of his wealth is tied to the BNB token and Binance, but said his outlook is based on years of experience in the industry.

He emphasized that rising global transaction volumes will continue to drive demand for financial technology, supporting crypto’s expansion over time regardless of short-term volatility.

CZ also described the flow of capital into AI as part of a natural innovation cycle, suggesting it could ultimately benefit the broader tech ecosystem.

On prediction markets, he said their growth could improve price discovery and liquidity. While speculation is involved, he noted that it plays a necessary role in financial markets.

Regarding regulation, CZ said proposed U.S. measures like the Digital Asset Market Clarity Act are important but unlikely to shape the industry’s long-term direction. He expects the U.S. to remain a leading force in crypto regulation as other countries develop their own rules.

He added that political changes after the upcoming midterm elections could bring increased scrutiny of pro-crypto policies and figures, including former President Donald Trump. CZ, who received a presidential pardon, said he is open to cooperating with any inquiries.

Although he avoids direct involvement in U.S. politics, CZ said election outcomes could still influence the regulatory landscape. He also suggested that crypto users are becoming an influential voting bloc, warning that anti-crypto positions could come with political costs.