The founder and CEO of the largest cryptocurrency exchange named Binance, Changpeng Zhao, has recently said that Bitcoin is (still) in a positive position – even considering the 70% fall since early 2018 and the strong rally towards the end of 2017.
According to Zhao, the cryptocurrency sector is in a better position than a year ago – in terms of its infrastructure, price, volume and mainstream interest. As he said:
“Just checked, btc price was $2500 a year ago, today $6800. Trading volume for btc was 780m a year ago, today is 3.4b. There you go,”
If we go backward, we can see the price of Bitcoin increasing from $890 to $20,000 which marks a growth of more than 2150%. In comparison to last year’s growth, the volume of Bitcoin has increased by five-fold which signifies a big surge in demand and interest towards cryptocurrencies as an emerging asset class.
However, Zhao believes that in mid-2017, the cryptocurrency sector was not built to this level in terms of infrastructure – especially for retail and institutional investors. As of July 2018, however, the crypto market has the institutional platform that Coinbase Custody established through which pensions, hedge funds and academic institutions can purchase digital assets in the value of millions of dollars.
Aside from this, major banks and financial institutions have publicly disclosed their desire to fill the growing demand in the traditional finance sector with cryptocurrencies – mostly by operating digital asset trading desks and exchanges in the future – once proper regulations is in place.
Last year, the CEO of Goldman Sachs said that if government-issued fiat currencies can dominate the financial system, other new currencies can also emerge as dominant mediums of exchange. As he pointed:
“If you go through that fiat currency where they say this is worth what it’s worth because I, the government, says it is, why couldn’t you have a consensus currency? And so it’s not for me, I don’t do it, I own no bitcoin. Goldman Sachs as far as I know… has no bitcoin, but if it does work out, I could give you the historical path why that could have happened. I’m not in this school of saying… because it’s uncomfortable with me, because it’s unfamiliar, this can’t happen, that’s too arrogant.”
In the end, the reality is that Bitcoin is dropping and we all need to face that – despite the recognition of cryptocurrencies as an emerging asset class by banks.
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