The current market downturn could last months or even years and keep Bitcoin under ATH, says CZ.
Since the beginning of the year, the crypto market has seen a downward pressure that led to the majority of coins losing upwards of 70% of their previous values. Bitcoin, being the top coin, hasn’t been spared the carnage. BTC has lost over 55% of its value since January 2022. In late 2021, Bitcoin had spiked to around $69k. Today, crypto is valued at around $20,500 per piece.
Binance CEO, Changpeng Zhao CZ, told The Guardian that the turmoil in the crypto market may not be ending any time soon. However, he stopped short of predicting the actual future and figures, saying that at the moment, it’s hard to predict the future of space. However, he opined that BTC’s price is bound to keep below the ATH point of $69k for some time – which could be months or even two years.
“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, however no one can predict the future”.
“$20k Is Very Low Today”
Going on, CZ said that the current market value for Bitcoin is low although not an entirely bad price. He proved this point by arguing that back in 2018 or 2019, people would celebrate if someone told them that Bitcoin would be worth $20k in 2022.
This is because, in 2018 and 2019, the crypto market went through a harsh winter that brought down BTC prices from a high of $20k to a low of $3k. In fact, that reduction ratio is way more than the current decrease from $69k to $20k.
“In 2017, we thought 20K was crazy high. Today, we think 20K is painfully low. The industry is growing,”
Price Fluctuations Are Normal
Based on these points, CZ is of the opinion that fluctuations in the crypto market is a normal thing. Prices go up when there’s a bull run, and they go down during a bear market. As a matter of fact, the industry has established the two market cycles, with the halving period marking the center.
“Historically, we see 4-year cycles, roughly 2yr bear, 2yr bull. But history may not predict the future. And I can’t predict the future.”
What’s Going On?
However, a few other factors have affected BTC and the crypto market in general. The hiking of interest rates by central banks is one of them. The rise of inflation is another. Also, the global economy seems to be entering a period of recession. With all these factors in play, any investments that are perceived as risky become unattractive.