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The CEO of one of the world's most popular cryptocurrency platforms has issued a dire two-year forecast for bitcoin.
According to the CEO of one of the world's most popular cryptocurrency platforms, bitcoin will not reach its all-time high for at least another two years.
In November, the world's most recognizable digital asset was trading at around $US69,000 ($A99,000), but it, like virtually every other cryptocurrency, has plummeted in value in recent months.
Its value has dropped below $US18,000 ($A25,300) this month as global markets in general have taken a beating due to soaring inflation, rising interest rates, and fears of a US recession in the coming year.
Bitcoin has recovered from its 52-week low, reaching $US20,707 ($A30,027) as of 8 a.m. today.
Despite the difficulties that crypto traders are experiencing, Changpeng 'CZ' Zhao, the founder and CEO of Binance, stated that anyone who invested in digital assets just four years ago would be "very happy" with their return.
However, in an interview with The Guardian, he predicted that it would take years for bitcoin to return to its November highs.
"Given the price drop from the all-time high of $US68,000 to $US20,000 now, I believe it will take some time to recover." "It will probably take a few months or a few years," Mr Zhao told the Guardian, adding, "No one can predict the future."
"$US20,000 we think is very low today," he continued. But, you know, if you told people in 2018 and 2019 that bitcoin would be worth $US20,000 in 2022, they would be overjoyed. Bitcoin was worth between $US3000 and $US6000 in 2018/19."
He stated that bitcoin's fluctuation was "normal."
"If you look at the bottom [of bitcoin], it's currently higher than the previous peak." So, whether normal or not, I believe price fluctuations are normal in an industry that is still growing," he said.
Panic is caused by fears of a global recession.
For the entire year, cryptocurrency has been on a downward trend.
However, things took a turn for the worse last weekend when investors panicked after the US Federal Reserve raised interest rates by 75 basis points.
This was in response to rising inflation – the latest May figures put US inflation at 8.6 percent, the highest since 1981.
It sparked fears of a global recession, and crypto investors retreated quickly, resulting in a mass sell-off and a significant drop in price for some of the world's top-ranked blockchains.
On Sunday morning, the number one cryptocurrency, bitcoin, fell to $US17,601.58 ($A25,300).
When compared to the beginning of last month, bitcoin was trading at $US36,141.33 ($A52,000), according to CoinMarketCap.
In fact, its lowest price in recent weeks represents a 74% drop in value since its November peak.
All of bitcoin's gains over the last two years of the pandemic have now been wiped out - BTC hasn't been this low since October 2020.
Although cryptocurrencies have weathered several winters and price fluctuations, one banking professional believes this one is the most severe, given how widely used blockchain is now.
"This is the first time bitcoin and other cryptocurrencies have gone through such an inflationary environment," Irfan Ahmad of State Street Digital in the Asia Pacific region told the Australian Financial Review.
"This is the fourth crypto winter, and the most severe due to wider adoption - we're calling it a polar vortex."
Nonetheless, Mr Ahmad believes that some of the most prominent digital tokens, such as bitcoin and ethereum, will weather the winter.
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"But, as an asset class, we believe [crypto] is here to stay," he told the publication.
"In the market, there will be an evolution of players and protocols."
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