June 26, 2022

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Bitcoin selloff is not ‘so terrible’

As cryptocurrencies nosedive this year, some are wondering whether the asset class, including bitcoin, is in a prolonged slump, or a so-called crypto winter. Not Binance Cofounder and Chief Marketing Officer Yi He.

“If you just look at the price of bitcoin right now, I don’t think it is totally winter,” He told Yahoo Finance in an interview. “Every time there’s a winter, it’s always warmer than the last winter. So sometime you can say it’s 100% Winter. Like if you look at 2014, 2015, or like two years ago, I think the nastiest things are probably stronger than last summer. So for the moment, I don’t really feel it’s so terrible.”

Instead, she thinks crypto is close to where the internet was during the 2000 dot-com bubble, pointing specifically to marketing and crypto ads for the Super Bowl and sports matches.

“I think we are very close to losses that match the time of the internet bubble,” she said.

So far, Binance’s public communications have been that the company believes the bear market is a time for building, and that while token prices may be down, the innovation is continuing. As an example, the company continues to hire as other major exchanges lay off key staff.

On Tuesday, bitcoin (BTC) was down 2.75% in the last 24 hours to $22,459. The digital coin has dropped 25% in the last seven days on expectations of aggressive Federal Reserve rate hikes and has lost nearly two-thirds of its value since its early November peak.

Wrapped Bitcoin logo displayed on a phone screen and representation of Bitcoin are seen in this illustration photo taken in Krakow, Poland on June 10, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

Wrapped Bitcoin logo displayed on a phone screen and representation of Bitcoin are seen in this illustration photo taken in Krakow, Poland on June 10, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

While she can’t predict price action in the next six months to a year, He believes over the next four years the price of major coins – Bitcoin, Ethereum, and Binance’s own BNB coin – will rise. That prediction is based on Bitcoin halving, where it’s taken four years for Bitcoin to hit its peak again after the halving event.

He thinks Ethereum will be a long-time winner that can keep rising in value because it has cultural support and hosts so many existing projects.

“It’s just like a luxury shopping mall,” she said. “Their gas fees are really high, but they have most of the traffic. They are also rich and a lot of original users are on it.”

She thinks Bitcoin, Etherum and Binance’s coin, BNB, will stick around for the long haul as leaders in the crypto space in the next five years.

The logo of Binance US is seen at a stand during the Bitcoin Conference 2022 in Miami Beach, Florida, U.S. April 6, 2022. REUTERS/Marco Bello

The logo of Binance US is seen at a stand during the Bitcoin Conference 2022 in Miami Beach, Florida, U.S. April 6, 2022. REUTERS/Marco Bello

He thinks the blockchain technology that underpins crypto and its application will improve over the next five years. She said there will be many more user cases using web3. Citing the example of news publications, He said news websites can decide how much advertising they want, while users reading the websites can help build value for the company by offering insights and guiding company decisions.

She said thanks to its transparency, blockchain technology can improve tracking things like raising money for a charitable foundation, monitoring donors, and tracking where and how the money is spent in programs.

“I think in the next five years the technology will improve as technologists and engineers try to dig deeper and build the tech side,” she said. “That just takes some time. A lot will improve, especially at the BNB chain.”

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Jennifer Schonberger covers cryptocurrencies and policy for Yahoo Finance. Follow her at @Jenniferisms.

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