Interview with Zhao Changpeng | The key catalyst for the next bull market, why can Bitcoin hold at $20,000?

Binance founder Changpeng Zhao (CZ) was interviewed by CNBC on 7/28, where he discussed the $20,000 support for Bitcoin, catalysts for the next bull market, and the uncertainty of U.S. regulation.

Talking about Coin Prices

Why Can Bitcoin Maintain $20,000?

CZ: No one can provide an exact reason, but the peak in 2017 was around $20,000, and logically, I think this is a psychological barrier.

Is this unrelated to currency supply, Nasdaq, and other correlations?

CZ: I believe these factors do have an impact, but fundamentally, any trading market includes a lot of psychological and human factors, so "the high point of the last bull market is likely the low point of the next cycle" may have formed a consensus.

What is the next major catalyst? Will it rise or fall?

CZ: I don't think anyone can predict accurately, just like no one really predicted that NFTs, DeFi, etc., would drive the last bull market. In 2017, it was mainly ICOs, and not many people anticipated these applications before they rose.

So, in the next bull market, the market will cover more things, and it is uncertain which applications will stand out, but the development direction is correct.

Many countries are also gradually adopting friendly regulatory frameworks rather than banning Bitcoin and cryptocurrencies; at the same time, macroeconomic conditions, high inflation, economic downturns, etc., may further promote the adoption of Bitcoin or the crypto field.

Cryptocurrency Relevance, Regulation

The correlation between cryptocurrency and the macroeconomy is so high, especially after the Federal Reserve releases interest rate decisions, cryptocurrency volatility is generally higher than stocks. If a real economic recession and sell-off are happening, why hold cryptocurrency?

CZ: Logically, the trend of cryptocurrencies should be negatively correlated with the stock market. Although the market value of cryptocurrencies is still very low compared to the stock market, over time, cryptocurrency investors now also involve stock trading, so the two may gradually become positively correlated. This is illogical, but that's how things develop.

What is your opinion on the SEC's continued regulatory actions?

CZ: In the United States, we need to deal with regulatory agencies in different jurisdictions of each state, which has some ambiguous definitions. Sometimes you have to listen to the central bank, sometimes it's the SEC, or a completely new regulatory body.

Usually, they just want to clarify the domestic regulatory framework, which is great, but the United States is a bit special, being a very large country with various regulatory agencies. There is uncertainty about who will regulate the crypto field.