The boss of one of the world’s most popular cryptocurrency platforms has made a punishing two-year prediction for bitcoin.
The boss of one of the world’s most popular cryptocurrency platforms has predicted bitcoin won’t surpass its all-time high for at least two years.
The world’s most recognizable digital asset was trading at around US$69,000 (A$99,000) in November, but its value – like just about every other cryptocurrency – has been dropping in recent months.
It saw its value plummet to less than US$18,000 (A$25,300) this month, as broader global markets took an absolute shock amid soaring inflation, rising interest rates interest and fears of a US recession in the coming year.
Bitcoin rebounded from its 52-week low at US$20,707 (A$30,027) at 8 a.m. today.
Despite the hard times felt by crypto traders, Changpeng Zhao, the founder and CEO of Binance, said anyone who invested in digital assets just four years ago would still be “very happy” to have them back.
However, in an interview with The Guardianhe predicted that it would be years before bitcoin hits the highs reached last November.
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“I think given this price drop, from the all-time high of $68,000 to $20,000 now, it will probably take some time to come back. It will probably take a few months or a few years,” Mr Zhao said. to Guardianadding: “No one can predict the future.”
He continued, “$20,000, we think is very little today. But you know, in 2018, 2019, if you told people that bitcoin will cost $20,000 in 2022, they would be very happy. In 2018/19, bitcoin was US$3,000, US$6,000.
He said it was “normal” for bitcoin to fluctuate the way it did.
“If you look down [of bitcoin], right now it’s higher than the last peak. So whether it’s normal or not, I think the industry is still growing, price fluctuations are normal,” he said.
Fears of a global recession spark panic
Throughout the year, the cryptocurrency has been on a bear run.
However, last weekend things took a turn for the worse as investors panicked after the US central bank raised the interest rate by 75 basis points.
This was in response to soaring inflation – the latest figures for May put US inflation at 8.6%, the worst since 1981.
He feared a global recession and crypto investors quickly pulled out, causing a massive sell-off and drastic price drop in some of the world’s top-ranked blockchains.
At the bottom, number one cryptocurrencybitcoin, fell to US$17,601.58 (A$25,300) on Sunday morning.
That’s a big drop considering that at the start of last month, bitcoin was trading at US$36,141.33 (A$52,000), according to CoinMarketCap.
In fact, its lowest price in the past few weeks represents a whopping 74% drop in value since its peak in November.
Now all of bitcoin’s gains over the last two years of the pandemic have been all but wiped out – BTC hasn’t been this low since October 2020.
Although cryptocurrencies have withstood several winters and price fluctuations, a banking professional said this one was the most extreme, given the widespread use of blockchain.
Irfan Ahmad, of State Street Digital in the Asia-Pacific region, told the Australian Financial Review“This is the first time bitcoin and other cryptocurrencies have gone through such an inflationary environment.
“This is the fourth crypto winter and the harshest considering wider adoption – we call it a polar vortex”.
That said, Ahmad believes some of the most prominent digital tokens like Bitcoin and Ethereum will survive the winter.
“But when it comes to an asset class, we think [crypto] is here to stay,” he told the publication.
“There is going to be an evolution of players and protocols in the market.”
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