Binance Founder Zhao Says Crypto Selloff Driven by AI Capital Shift, Geopolitics and Four-Year Cycle

The cryptocurrency market's weakness in the first half of this year was driven by a mix of factors, including capital flowing into the artificial intelligence industry, geopolitical risks and the traditional four-year cycle.

Binance founder Changpeng Zhao told CoinDesk on June 27 that the roughly 50% correction in the crypto market in the first half of 2026 could not be explained by a single factor. Geopolitical tensions, capital shifting into the AI industry and the traditional four-year cycle pressured the market at the same time.

Bitcoin has fallen to about $60,000 after reaching a record high of roughly $126,000 last year, he said. Even so, Zhao expects the industry's long-term growth trend to remain intact despite short-term price pressure.

He also said emerging industries such as AI are absorbing market liquidity, but described that as a positive development over the long term. As global demand for trading and financial technology increases, the crypto industry's size will continue to expand, he added.

Zhao also expressed optimism about prediction markets, saying they would contribute to price discovery and improve market liquidity.

On regulation, Zhao said the US could push to pass legislation such as the Clarity Act before year-end. Still, he said such policy moves would not alter the crypto industry's long-term growth trajectory. He added that the US could still play a leading role in crypto regulation even if the Clarity Act does not pass this year.