Given the current price drop, bitcoin might need up to two years to tap its all-time high again, Changpeng Zhao opined.
Bitcoin could stay below its historical high of $69,000 for the next two years after the latest digital asset market rout, according to the chief executive of the world’s largest cryptocurrency exchange.
Changpeng Zhao, founder and chief executive of Binance, said people would have been “very happy” four years ago had they been told that bitcoin would be trading at $20,000 in 2022. The cornerstone crypto asset fell below that level at the weekend in a symbolic move that represented a wipeout of gains for many long-term bitcoin holders.
“I think given this price drop, from the all-time high of 68k to 20k now, it will probably take a while to get back. It probably will take a few months or a couple of years,” Zhao told the Guardian, adding that “no one can predict the future”.
He added: “20k we think is very low today. But you know, in 2018, 2019, if you told people bitcoin will be 20k in 2022, they would be very happy. In 2018/19, bitcoin was $3,000, $6,000.”
On Wednesday June 21, 2022, bitcoin was trading at $20,491 according to CoinDesk, having hit levels not seen since late 2020 at the weekend.
Asked whether he considered the current fluctuations in bitcoin and crypto prices to be “normal”, as he had described them in an interview earlier this month, he said: “If you look at the bottom [of bitcoin], right now it’s higher than the last peak. So, whether normal or not, I think with the industry still definitely growing, fluctuations in price is normal.”
Bitcoin and other cryptocurrencies have been affected by several factors including stock market declines linked to rising inflation and ensuing hikes in interest by central banks. Raising rates – a path taken by the US, UK and Swiss central banks last week – can make risky assets less attractive. For instance, certain tech stocks, whose price can be based on expectations of strong future earnings over many decades, can be relatively less appealing than the fixed returns on offer immediately from investments such as bonds, which become more attractive in a higher lending rate environment.
However, the crypto market’s woes have also been linked to problems specific to digital assets. Last month, the failure of terra, a so-called stablecoin whose value was supposed to be pegged to the dollar, rattled faith in cryptocurrencies. It was followed last week by Celsius Network, a bank-like business that offered high rates of return on cryptocurrency deposits, stopping customer withdrawals. Then Three Arrows Capital, a hedge fund that made expensive bets on the crypto markets, admitted it was in trouble.
Zhao declined to comment on a Bloomberg report that the US financial watchdog is investigating whether Binance broke securities rules when it launched an initial coin offering – a form of fundraising for companies – of its BNB token in 2017.
Stay in the know on crypto by frequently visiting Crypto News Today
“We talk with all regulators around the world. They send us questions, we answer them, with an investigation or not,” he said.
Binance has been banned from undertaking any regulated activity in the UK by the Financial Conduct Authority, which said in June last year the firm was “not capable of being effectively supervised”.
Binance temporarily halted withdrawals last Monday because of what it called a “stuck on-chain transaction”. Asked if the withdrawal freeze was related to the wider crypto market problems, Zhao said: “I don’t think it’s a pure coincidence. In market turmoil, there’s more transactions on a blockchain and many of the blockchain nodes do fail.”
Cryptocurrency is the term for a group of digital assets that share the same underlying structure as bitcoin: a publicly available “blockchain” that records ownership without having any central authority in control. A node is a device within the blockchain network that validates transactions.
Asked if the digital asset market was approaching another “crypto winter” – a phrase coined during a market dip in 2017/18 – Zhao said some projects could be in trouble because they were conceived when the market was at its most recent peak. The current value of the entire crypto market is just under $1tn, compared with around $3tn in November last year, with bitcoin hitting an all-time high of nearly $69,000 over the same period.
“Right now, it definitely feels many projects are in a bind because once you get to an all-time high, all the projects spend money like they were always going to be at that all-time high. So now when it drops it feels like during the winter. But for projects that have conserved cash, we’re still fine, we’re still hiring, we’re still growing.” Read More at THEGUARDIAN
Please Read Essential Disclaimer Information Here.
© 2022-2023 Crypto Caster provides information. CryptoCaster.world does not provide investment advice. Do your research before taking a market position on the purchase of cryptocurrency and other asset classes. Past performance of any asset is not indicative of future results. All rights reserved.
Consider Donating to CryptoCaster℠ Via Wallet Coin/Token Addresses Below.
BTC – bc1qgdnd752esyl4jv6nhz3ypuzwa6wav9wuzaeg9g
ETH – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
MATIC – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
LITECOIN – ltc1qxsgp5fykl0007hnwgl93zr9vngwd2jxwlddvqt