Changpeng Zhao, the CEO and founder of Binance, the biggest cryptocurrency exchange in the world, has revealed that bitcoin is still in a good position even after its 70% price drop since the beginning of the year while noting its strong rally throughout the previous year.
In 2017, the price of bitcoin experienced a tremendous increase from $890 in January to $20,000 in December; that is a whopping 2150% rise. When compared to mid-2017, Bitcoin’s price rose by five-fold, leading to a significant increase in demand for the digital currency, the price hike also increased people’s interest in cryptocurrencies as an asset for investors in the public market.
During an interview with a cryptocurrency reporter and researcher in Switzerland, Bianca Chen, Changpeng Zhao stated that the virtual currency market is currently in a relatively better position than last year, regarding price, volume, infrastructure, and general interest. Zhao said that:
“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.”
The cryptocurrency market lacked proper infrastructure to serve both the individual and institutional investors in mid-2017. However, the crypto sector later got an institutional platform called Coinbase Custody established in July, with which academic institutions, hedge funds, and pensions can buy digital assets worth millions of dollars.
Major Financial Institutions Intend to Facilitate Cryptocurrency Use
Top banks and financial institutions like Goldman Sachs, Morgan Stanley, and JPMorgan have reportedly publicized their plans to facilitate the increasing demand from their customers in the traditional finance sector towards virtual currencies.
These financial companies intend to run digital asset trading desks and exchange platforms in the future, although the uncertainty around the regulation of the crypto exchange market by the US financial authorities seems to be what is hindering them.
The CEO of Goldman Sachs, Lloyd Blankfein, noted that the domination of the financial system by government-operated fiat currencies means that consensus currencies can also become dominant mediums of exchange. He added that thinking that cryptocurrencies cannot work because they are centered on new principles, fundamentals, and philosophies would be arrogant. Blankfein stated that:
“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.”