Yesterday, the co-founder and CEO of Binance, Changpeng CZ Zhao, participated in an AMA (Ask Me Anything) session on Twitter, in which he revealed his prediction on the price of Bitcoin.
In answering various questions CZ said that the exchange is preparing for higher trading volumes in the next eighteen months.
Indeed, his prediction on Bitcoin is precisely about what will happen between now and the end of 2024.
Bitcoin’s halving and Binance CEO’s prediction
The focus of his reasoning is the Bitcoin halving that will presumably take place at the end of April 2024.
In fact, there is quite widespread positive sentiment toward the halving, due to purely historical reasons.
During yesterday’s live broadcast, the CEO of Binance pointed out that the price of Bitcoin has historically moved upward after the halving, saying that “the year after Bitcoin halving is usually the bull year.”
Indeed to date there have already been three halvings (in 2012, 2016, and 2020), and in all cases the following year there was a strong bullrun that caused it to rise a lot.
According to CZ, the most likely thing is that this dynamic will also occur between 2024 and 2025, believing this to be the most likely year for the next big bullrun.
Past speculative bubbles
It is worth noting that those of 2013, 2017 and 2021 were not just simple bullruns, but real speculative bubbles that burst the following year.
However, in no case was the bottom of the subsequent bear-market lower than the bottom of the previous cycle’s bear-market.
Given that Bitcoin‘s halving occurs about once every four years, and given how the price behaves after the halving, this process actually generates real four-year cycles that affect the entire crypto market.
The first bubble took the price from about $10 to $1,100, and thereafter the price never returned to $10.
The bottom of the first post-bubble bear-market was at about $150, and the second bubble pushed the price to nearly $20,000.
The bottom of the second post-bubble bear-market was at about $3,200, and the third big bullrun, which was the last one, pushed the price to almost $70,000.
For now the bottom of the third post-bubble bear-market was about $15,500, so that dynamic appears to be for all intents and purposes still in place.
The CEO of Binance discusses the BlackRock issue: prediction on Bitcoin
The CEO of Binance also discussed the issue related to the entry into the crypto markets of the world’s largest asset manager, namely BlackRock.
Indeed, some have expressed concern about the entry of such a traditional finance giant into the crypto markets, but CZ’s prediction is that this will end up being extremely beneficial for this market.
According to CZ, anyone from the outside who enters the crypto world will bring other people into it, although it will obviously increase competition among industry players.
However, he believes that current users of crypto platforms overlap only minimally with those of platforms in use by traditional finance.
Indeed, the offering of ETFs on Bitcoin is certainly not aimed at those who operate on crypto exchanges, but specifically at those who still operate only on traditional platforms.
This possible entry of new traditional players, and thus new users, into the crypto markets, combined with the halving of Bitcoin, increases the chances of another bull run between 2024 and 2025, according to CZ.
Moreover, the BlackRock case seems even more far-reaching than that.
The change of mindset
In 2017, the CEO of BlackRock, Larry Fink, had called Bitcoin a currency for criminals.
Yesterday, however, he called it digital gold.
Given BlackRock’s outright starring role in traditional financial markets, this shift could be a symptom of a more general change in traditional finance’s attitude toward Bitcoin.
However, Bitcoin should not be confused with altcoins, and especially with shitcoins. In this specific case, the change of mindset concerns the approach of traditional finance toward Bitcoin, and not cryptocurrencies as a whole.
Perhaps even Ethereum is part of this mindset shift, and perhaps stablecoins as well, but it is still too early to say that it concerns the entire crypto sector.
If, as is envisioned, mainstream finance decides to adopt Bitcoin as if it were a financial asset like any other, the amount of capital that could pour into the Bitcoin market is potentially enormous, and far greater than that which has already poured in over the past decade.
With this in mind, CZ’s prediction seems to make perfect sense, although there are no certainties at all.
Something else entirely concerns the approach of mainstream finance, and especially government regulators, to crypto exchanges like Binance, as evidenced by the sort of war they are waging all around the world.