The CEO of the leasing cryptocurrency exchange Binance, Changpeng Zhao, believes Bitcoin has a lot left to give. In fact, Zhao recently suggested that Bitcoin’s market capitalization could skyrocket to $2 trillion. Moreover, that would equal a Bitcoin price of roughly $100,000.
The US prepares a $2 trillion stimulus package
This comment came after trillions have been in the news for the past few days. Specifically, the US is planning a gargantuan stimulus package in order to revitalize the American economy. Following the recent acceleration in the global spread of COVID-19, President Donald Trump began teasing a $1 trillion package.
Earlier today, the US Senate was reportedly able to agree with the White House on a whopping $2 trillion deal. This stimulus package is the result of a bipartisan compromise to cushion COVID-19’s effects on the US economy.
What’s more, the US Federal Reserve is also ramping up efforts to support the US economy and stock market. The Fed recently began aggressively buying government bonds and mortgage securities without a limit – something observers call “quantitative easing infinity”.
What if Bitcoin had a $2 trillion market cap
In fact, analysts even suggest that this could balloon the Federal Reserve’s balance sheet to a mind-boggling $10 trillion. If so, it is unclear how the Federal Reserve could ever offload these securities without massively disturbing the market.
All of this is likely what set off Zhao’s latest comments. Comparing the recent US stimulus package to Bitcoin’s market capitalization, Zhao notes what a Bitcoin market cap of $2 trillion would mean:
“As we get used to talk about Trillions, a modest $2 trillion market cap of #bitcoin will put 1 BTC at $100,000. Not such a hard to imagine number now, right?”
Zhao argues Bitcoin could “easily” reach $100,000
Zhao’s comment regarding $2 trillion being a “modest” market capitalization for Bitcoin likely relates to the US’ recurring stimulus packages. Although this latest $2 trillion stimulus package could seem like a black swan event, it comes less than 12 years following another stimulus package of nearly a billion dollars.
Additionally, Zhao also notes that this comparison is somewhat unfair – in that Bitcoin likely wouldn’t require a $2 trillion influx to acheive a comparable market capitalization. Instead, Zhao suggests that the large amount of Bitcoin “HODLers” would increase the premier crypto’s price quicker.
“As most BTC are not for sell (HODLers), we only need a small portion of that $2t to buy to reach it.”
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.