Summary
- Changpeng Zhao, founder of Binance, expressed at the Bitcoin Asia conference in Hong Kong that Bitcoin is on track to become more significant than gold, with the current market valuation gap being about tenfold.
- He indicated that transitioning large nations from gold to Bitcoin will take years due to established systems for valuing and holding gold.
- Zhao candidly described his advice to governments about crypto reserves as "a little bit self-serving," given that BNB is part of his suggested portfolio.
During his speech at the Bitcoin Asia conference on Thursday, Binance founder Changpeng Zhao claimed that Bitcoin could surpass gold in importance, potentially during the next bull market.
"I am confident that Bitcoin will become more significant than gold," Zhao stated in a session titled "The Bitcoin Century" when asked if Bitcoin would eventually outpace gold for national reserves.
He emphasized that the challenge lies not in technology but in institutional inertia, as many countries already have established frameworks for gold valuation and storage. Transitioning these nations to Bitcoin will require considerable time, although he believes it is inevitable, especially as the market value gap between gold and Bitcoin has decreased to approximately tenfold.
“I anticipate Bitcoin will overtake gold fairly soon,” he noted, adding, "It could happen in the next bull run." Zhao characterized Bitcoin as a superior asset compared to gold, humorously acknowledging that longtime Bitcoin skeptic Peter Schiff would likely disagree.
Zhao also shared his strategy for advising governments on crypto reserves, describing it as "quite straightforward and a little self-serving." He recommends excluding stablecoins, focusing instead on the top five cryptocurrencies by market capitalization, which would suggest allocations of around 50% Bitcoin, 10% to 20% Ethereum, and a portion for BNB, the token linked to his exchange.
AI, Tokens, and Data Centers
Zhao predicts that AI agents will start using cryptocurrencies for transactions, initially with stablecoins. He mentioned that integrating Bitcoin into this framework would be a natural progression.
Furthermore, he has been in talks with several leading AI firms about potential token launches, as these companies face substantial capital needs that their current valuations cannot meet. Zhao pointed out that the cost of a gigawatt of computing power ranges from $30 billion to $50 billion, and some companies are aspiring for hundreds of gigawatts within a few years, potentially amounting to trillions of dollars in investment.
One of the models under consideration involves a “data center token” that would eventually allow holders to earn rewards or access computing resources, and could also extend to subscriptions and model usage.
According to Zhao, trading in cryptocurrencies is likely to embrace AI before payment systems do, as consumers can complete purchases after an agent finds a deal. He asserted that trading requires rapid information gathering and quick reactions to market news, estimating that AI could enhance efficiency by a factor of ten.
Zhao, who stepped down as Binance’s CEO in 2023 after admitting guilt to a U.S. money laundering charge, also commented on Bitcoin's price potential. He believes Bitcoin reaching $1 million would be beneficial and is optimistic that this could happen sooner than 25 years from now. He added, “It’s going to happen much quicker, but beyond just price, we need much greater utility. We need Bitcoin transactions to occur on a large scale and for Bitcoin to serve as a reserve for retirement funds. It will reach that point.”