- Changpeng Zhao sees Bitcoin price concerns as relative. He commented that four years ago people would have been happy with the current price of $20,000.
- The CEO did not comment on the investigation that the SEC is conducting on the company for violation of regulations.
- According to Zhao, the worst of the crypto winter that devastated the price of BTC and the other cryptos has already passed.
According to Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, the price of Bitcoin (BTC) could remain below its all-time high of $69,000 for at least two years, after the recent stock market and crypto crash.
The world’s largest coin by market capitalization traded below $20,000 last week. The drop represented further losses for investors who still hold significant positions in the token.
However, Zhao commented that four years ago, people would have been “very happy” if he had told them that BTC would be worth $20,000 in 2022.
"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," he told The Guardian on Thursday. "It probably will take a few months or a couple of years.”
The Binance founder believes that “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.”
“Price Fluctuations Are Normal”
On Friday at 10:01 (GMT-4), Bitcoin was trading at $21,294.65, according to CoinMarketCap. But it hasn’t broken the $22,000 mark in the past two weeks.
When asked if the current fluctuations of BTC and the other cryptocurrencies were normal, Zhao stated:
"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."
Zhao refrained from commenting on a report published by Bloomberg stating that Binance is under investigation by the United States Securities and Exchange Commission (SEC), the US financial regulator.
The platform was accused of allegedly violating securities rules in 2017, in connection with launching an initial coin offering, used by companies to raise funds, of its BNB token.
He only said that his company maintains contact with the regulators of all the countries where the platform operates. “We talk with all regulators around the world. They send us questions, we answer them, with an investigation or not.”
Problems for Many Projects Will Continue
In the UK, Binance has been barred from operating since June 2021 as the Financial Conduct Authority concluded that the company is “not capable of being effectively supervised.”
Binance suspended Bitcoin withdrawals for a few hours on June 13, citing “Stuck On-Chain Transactions.” This happened after Celsius Network also stopped all deposit withdrawals to its clients to avoid bankruptcy.
On movements in the market, the CEO of Binance 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."
For Zhao, the problems in the crypto space will continue for some projects that were conceived during the most recent crypto boom.
“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,” says Zhao.
“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."
“The Worst Part is Probably Over”
Speaking at the Point Zero Forum in Zurich on Wednesday, the Binance chief referred to the crypto winter that has seen Bitcoin lose 56% in value this year. “I think the worst part is probably over. We have seen a pretty steep drop," Zhao was quoted as saying by CoinDesk journalist Sandali.
Likewise, when comparing the collapse of the market this year with the bear market that occurred in 2018, he argued that the key difference lies in the leverage of the system, which this time is higher.
He said that there are decentralized financial projects and funds that lend money to each other in a “circular way.” But he said that despite these practices, the deleveraging “cascades” that accelerated the market’s decline in recent weeks are shrinking.