Changpeng Zhao said the floor of the cryptocurrency market has continued to climb across cycles, pointing to Bitcoin’s previous low near 16,000 USD in 2022 and suggesting a new base around 60,000 USD. While current prices remain roughly 50% below recent highs, they are still significantly above prior cycle lows, indicating a broader upward trend.
That view is now being tested. Bitcoin recently fell below the 60,000 USD level, dropping to around 58,000 USD, its lowest point since late 2024. The move represents a decline of more than 50% from its October 2025 peak and highlights ongoing pressure in the market.
Crypto market floor rises, but recent drop challenges outlook
Changpeng Zhao said the floor of the cryptocurrency market has continued to climb across cycles, pointing to Bitcoin’s previous low near 16,000 USD in 2022 and suggesting a new base around 60,000 USD. While current prices remain roughly 50% below recent highs, they are still significantly above prior cycle lows, indicating a broader upward trend.
That view is now being tested. Bitcoin recently fell below the 60,000 USD level, dropping to around 58,000 USD, its lowest point since late 2024. The move represents a decline of more than 50% from its October 2025 peak and highlights ongoing pressure in the market.
Selling pressure builds as liquidations rise
Recent trading activity shows a shift toward defensive positioning. Selling has outweighed buying, and price rebounds have come with weaker volume compared to prior declines. Over a 24-hour period, roughly 1 billion USD in liquidations were recorded, with about 806 million USD tied to leveraged long positions.
Exchange-traded funds have also seen significant outflows, with June alone recording net withdrawals of 3.61 billion USD. While large-scale institutional failures have not emerged, the crypto-collateralized lending market contracted by 5.1% in the first quarter of 2026, and decentralized finance lending has declined for two consecutive quarters.
Lower leverage and limited systemic risk
Zhao noted that industry leverage remains lower than in previous downturns, with fewer high-risk yield products tied to lending or stablecoins. These segments now represent a smaller share of the overall market, reducing the likelihood of widespread systemic stress.
He also highlighted the absence of major institutional bankruptcies in recent months as a sign of improved market resilience compared to earlier cycles.
Traditional finance and blockchain continue to merge
The integration of blockchain technology into traditional financial systems is accelerating. Major firms including JPMorgan, Citi, and BlackRock are actively developing tokenized assets and blockchain-based financial infrastructure.
This trend reflects a longer-term shift toward using blockchain as a foundation for financial operations rather than purely speculative trading. The development of these systems has continued despite market volatility, suggesting that institutional interest in the technology remains steady.
Zhao said centralized and decentralized systems are likely to coexist, with users choosing solutions based on cost, security, and ease of use. Governments and corporations are also exploring proprietary blockchain networks, though adoption timelines remain uncertain.
Decentralized platforms gain ground
New types of exchanges are expanding their presence in the market. Platforms such as Hyperliquid have grown rapidly, capturing about 32% of decentralized perpetual trading volume and reaching more than 172 billion USD in 30-day activity.
These platforms are increasingly offering access to real-world assets, including commodities and equity indices, signaling demand for continuous global trading across a broader range of instruments.
Zhao described such platforms as occupying a middle ground between centralized exchanges and fully on-chain systems, introducing alternative operational models through the use of smart contracts.
Infrastructure development continues during downturn
Development of core blockchain infrastructure has continued through the market slowdown. The BNB Chain is undergoing upgrades aimed at increasing speed, reducing costs, and improving privacy.
Planned updates later in 2026 are expected to enhance transaction throughput and enable near-instant finality. Zhao said quieter market periods are often the most effective time to implement technical improvements.
Ethereum is also evolving, with developers reassessing the balance between layer-1 and layer-2 solutions as they navigate trade-offs between scalability, cost, and decentralization.
Artificial intelligence and regulation diverge
Zhao pointed to a growing divergence in how regulators approach artificial intelligence and cryptocurrency. In the United States, AI policy has largely focused on voluntary frameworks designed to support innovation, while digital assets face stricter financial oversight.
He warned that artificial intelligence could ultimately present more complex regulatory challenges due to its capabilities in automation and data manipulation.
Zhao also noted that access to AI tools varies across regions, with some applications restricted depending on local regulations.
Venture investment focuses on long-term impact
Through Yzi Labs, Zhao continues to allocate capital across emerging sectors, with approximately 70% directed toward cryptocurrency, 20% to artificial intelligence, and 10% to biotechnology.
The firm has backed a range of projects, from decentralized financial protocols to medical technologies such as artificial womb research and cartilage regeneration. Some of these initiatives are advancing toward early human trials.
The strategy accepts high failure rates in early-stage ventures, focusing instead on capturing long-term breakthroughs in technology and science.
Blockchain seen as key to future financial systems
Zhao said blockchain will play a central role in enabling AI-driven commerce, arguing that current payment systems lack the automation needed for such integration.
He added that combining artificial intelligence, blockchain, and the internet could lead to a more efficient global financial system, where value moves through decentralized networks designed for speed, transparency, and accessibility.
As TradFi and crypto converge, explore how they intersect in this TradFi and blockchain integration guide for deeper insight.
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