Changpeng Zhao Also Thinks The Recession Would Soar Bitcoin’s Market Capitalization To $2 Trillion
The crypto world fell under the hits of the global economic downturn, due to the recent COVID-19 outbreak. While the stock market wiped almost 40% of its gains, many saw Bitcoin to be a safe haven asset in times of global crisis.
However, the world’s largest cryptocurrency to date failed to stand up to the beliefs of a significant portion of the crypto sector, falling to sub-$4,000 levels, before regaining some of its momentum. Despite the recent rallies, the 30% drop, leading to massive sell-offs, led to lowered trading volumes and market capitalization.
Now, amid Coronavirus outbreak and the U.S. Federal Reserve’s plans for close to $6 trillion stimulus issuance, the financial world may see vast inflation. The Federal Reserve, as well as the national banks of most of the COVID-19-affected countries, plan to print colossal amounts of cash and inject them into the economy. During the havoc, crypto bulls are stepping up their game. Some of them even predicted Bitcoin to hit $100,000 per coin.
One of the most notorious Bitcoin bulls, Binance’s CEO Changpeng Zhao, made another bullish statement on Twitter. He noted that “when speaking in trillions, a modest prediction of $2 trillion market capitalization would mean Bitcoin’s price will be $100,000 per BTC.
Zhao’s predictions come amid the U.S. Senate giving its approval to distribute $2 trillion in relief packages to U.S. citizens affected by the virus outbreak. The stimulus package is by far the most significant rescue deal in the history of the United States.
However, most of the Bitcoin bullishness comes from the long-awaited Bitcoin halving, scheduled for May. The halving process means the reward Bitcoin miners get from mining a block would be cut in half.
„Most of us agree on the fact that the moves by the U.S. Federal Reserve would drive increased inflation so that Bitcoin may become a hedge against the depreciation of the U.S. Dollar. The halving process and the current global financial situation may drive a drastic positive impact on Bitcoin, as well as on the entire crypto sector in the medium and long-term timeframes.” eToro market analyst Simon Peters stated.
Meanwhile, the crypto mining community awaits Bitcoin’s halving. The reward for mining a block would fall from 12,5 to 6.25 BTC, which cuts the new Bitcoin supply. A halving occurs once every four years, with previous events in 2012 and 2016. The ultimate goal is to reduce the mining price until Bitcoin reaches its maximum coin supply of 21 million BTC. However, Bitcoin won’t reach 21 million BTC in circulation at least for 100 years ahead.
CoinCorner’s CEO Danny Scott commented on the possible trends in front of Bitcoin, citing that “Bitcoin received a massive positive push in the months after a halvening, which now may be boosted by the current COVID-19 disease.”
“Despite the halvening, the COVID-19 crisis led to massive sell-offs for fiat cash, which caused liquidity crisis and global market drops. Even gold lost some of its momentum.” Scott concluded.
No comments:
Post a Comment