Because 2^3 = 8, 2^4 = 16, 2^5 = 32,…
Computers work with only 2 values 1 and 0 called bits.
You can imagine the chips storing these as apartments.
Each door in the apartment must have a number (address).
2^x tells us the maximum number of doors with x being the number of bits needed to write the address for the door.
If you want to write 20 you will find that 2^4 (16) is not enough and you need 2^5, but at that point you might as well use all 32 addresses.
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