By Scott Murdoch

Binance Chief Executive Richard Teng said on Friday bitcoin’s sharp drop in the past month was the result of investors deleveraging cryptocurrency holdings and risk aversion in line with that seen in most major asset classes.

Bitcoin, the world’s most valuable cryptocurrency, has tumbled 21.2% in November, bringing losses over the past three months to 23.2% as chances increase that it will end the year below $90,000.

The slump comes after bitcoin hit an all-time peak above $126,000 in early October.

“As with any asset class, there are always different cycles and volatility. What you’re seeing is not only happening to crypto prices,” Teng said at a media roundtable in Sydney on Friday.

“At this point in time, there’s a bit of risk (off) and deleveraging happening as well.”

Global markets sold off this week, with investors rattled by an AI-led valuation bubble and the possibility that it could burst. So far, better-than-expected earnings from Nvidia NVDA have failed to quell those worries.

Teng said despite the decline, bitcoin is trading at more than double its level in 2024, when institutions like BlackRock began launching crypto investments and products.

“Over the past 1.5 years, the crypto sector has performed very, very well, so it’s not unexpected that people do take profit,” Teng said.

“Any consolidation is actually healthy for the industry, for the industry to take a breather, find its feet.”

Teng said there had not been a decision on whether Binance founder Changpeng Zhao, known as CZ, would return to the exchange after he was pardoned by U.S. President Donald Trump in October.

“CZ has always been a controlling shareholder. As controlling shareholder he has more shareholder rights associated with that,” he said.

“On the day to day basis, I work very closely with the board directors that comprises seven members, three independent directors, including an independent chairman, so we continue to chart the future strategy of the company.”

Zhao, a citizen of Canada who was born in China, paid a $50 million fine and served nearly four months in prison last year after pleading guilty to violating U.S. money laundering laws.

Zhao was replaced as chief executive by Teng in 2023.