Bitcoin could stay below $ 69,000 peak for two years, says Binance CEO | Bitcoin

Bitcoin could stay below the historic high of $ 69,000 for the next two years following the latest market route for digital assets, according to the CEO of the world’s largest cryptocurrency exchange.

Changpeng Zhao, founder and CEO of Binance, said people would be “very happy” four years ago had they been told that bitcoin would trade for $ 20,000 by 2022. The cornerstone of cryptocurrencies fell below this level over the weekend in a symbolic move which represented a wiping out 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 come back. It will probably 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 that bitcoin will be 20k in 2022, they would be very happy. In 2018/19 bitcoin was $ 3000, $ 6000 . “

On Wednesday, bitcoin traded at $ 20,491 according to CoinDesk, after hitting hit levels not seen since the end of 2020 this weekend.

Asked if he considered the current fluctuations in bitcoin and cryptocurrencies 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 it’s normal or not, I think with the industry still definitely growing, price fluctuations are normal. “

Bitcoin and other cryptocurrencies have been affected by several factors, including a decline in the stock market linked to rising inflation and subsequent interest rate hikes by central banks. Raising interest rates – a course taken by the US, British and Swiss central banks last week – could make risky assets less attractive. For example, certain technology stocks, whose price may be based on expectations of strong future earnings over many decades, may be relatively less attractive than the fixed return offered immediately from investments such as bonds, which become more attractive in an environment of higher lending rates. .

However, the problems of the crypto market have also been linked to problems specific to digital assets. Last month, terra, a so-called stablecoin whose value was supposed to be linked to the dollar, collapsed, believing in cryptocurrencies. It was followed last week by Celsius Network, a bank-like business that offered high returns on cryptocurrency deposits, and stopped customer withdrawals. Then Three Arrows Capital, a hedge fund that made expensive games in the crypto markets, admitted that it was in trouble.

Zhao declined to comment on a Bloomberg report that the US Treasury watchdog is investigating whether Binance violated securities rules when it launched an initial coin offering – a form of corporate fundraising – of the 2017 BNB token.

“We talk to all the regulators around the world. They send us questions, we answer them, with investigation or not,” he said.

Binance has been banned from conducting any regulated activity in the UK by the Financial Conduct Authority, which said in June last year that the company “was unable to be effectively monitored”.

Binance suspended temporary withdrawals last Monday due to what it called a “fixed chain transaction”. Asked if the withdrawal stop was related to the bigger problems in the crypto market, Zhao said: “I do not think it is a pure coincidence. In market turmoil, there are several transactions on a blockchain, and many of the blockchain nodes fail. “

Cryptocurrency is the term for a group of digital assets that share the same underlying structure as bitcoin: a publicly available “blockchain” that registers 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 made during a market crash in 2017/18 – Zhao said that some projects may be in trouble because they were conceived when the market was at its last peak. The current value of the entire crypto market is just under $ 1tn, compared to around $ 3tn in November last year, with bitcoin reaching an all-time high of almost $ 69,000 in the same period.

“Right now it definitely feels like a lot of projects are in a pinch, because once you reach a record high, all the projects spend money as if they were always at the highest level. So now when it falls it feels like winter. But for projects that have saved money, we are still doing well, we are still hiring, we are still growing. “