According to Changpeng Zhao, the CEO of Binance – the largest and most popular digital currency exchange in the world – bitcoin could remain below its peak price of $68,000 for as long as two years.
Changpeng Zhao on BTC: We Won’t See that Peak Price Again for a While
In a recent interview, Zhao explained that bitcoin being at $20,000 like it is now would have made people “very happy” about four or five years ago, but ever since traders got a real taste of the investment pie, they are not too excited about bitcoin’s present price level considering its about 70 percent lower than where it was just over six months ago.
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. No one can predict the future… 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.
Despite bitcoin being around for roughly 13 years, Zhao stated that the world’s number one digital currency by market cap is still relatively new by comparison to other assets, and thus price fluctuations – even dramatic ones, like what we’re seeing today – cannot be considered out of the ordinary. 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 are normal.
Zhao also commented on whether the space will see a “crypto winter” in the coming weeks. While he didn’t go this far, he did say that certain projects are likely to experience trouble in that they were created while the market was peaking. At the time of writing, the market valuation of the crypto space has fallen from $3 trillion to about $900 billion.
Right now, it 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.
Inflation Is the Main Culprit
Many reasons have been attributed to the fall of crypto prices, a big one being inflation. Right now, in the U.S. alone, inflation is at an all-time high of about 8.6 percent as the Fed continues to hike rates, making home loans, auto loans, and many other items necessary for everyday life almost unobtainable for average people.
In the United Kingdom, inflation is even higher at about 9.1 percent.
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