Pantera Capital CEO Optimistic About Bitcoin’s Bull Market
(Originally posted on : Crypto News – iGaming.org )
After suffering a protracted bear market, Pantera Capital CEO Dan Morehead thinks that Bitcoin has now reached a turning point. Morehead claims that there comes a point where markets cannot continue to fall for an infinite amount of time based on his 35 years of expertise trading market cycles. The recent failures of Terra and the cryptocurrency exchange FTX have added to the industry’s suffering and may have sparked a bull market.
Says Morehead, “It’s been a full year since TerraLUNA/SBF/etc. It’s been enough time. We can rally now.”
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Bitcoin’s Decoupling from Traditional Markets
The decoupling of digital assets from conventional markets, in Morehead’s opinion, is one of the noteworthy trends in the crypto industry. He makes the point that any future flaws in stocks or bonds would not have as big of an effect on cryptocurrencies as many experts formerly thought.
“Blockchain has massively decoupled. It’s just hard to notice in the moment,” says Morehead.
Blockchain assets and risky assets have historically had nothing in common. Using Bitcoin as a stand-in for the blockchain, the S&P 500 only had a 0.03 correlation for the first nine years of its existence. This absence of correlation was a key justification for thinking of cryptocurrencies as a fantasy investment with excellent past returns and little connection to conventional assets.
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The link, which peaked at 0.76 last year, was caused by the overwhelming leverage used by centralized corporations and the actions of individuals like Sam Bankman-Fried. This brief increase in correlation was an aberration, and it is again back below 0.1 for Bitcoin and the S&P 500.
The basic nature of blockchain, according to Morehead, is independent of interest rates, giving it a minimal connection with conventional asset classes like equities, bonds, and real estate, which are significantly impacted by rates.
BlackRock ETF | A Potential Catalyst for Bitcoin’s Surge
Morehead emphasizes the fund’s tremendous rise of 41,960% since its start while discussing Pantera’s record. Then, he makes note of something that could be even more alluring for certain investors: a BlackRock ETF (exchange-traded fund) that is just focused on Bitcoin.
“If approved, we anticipate a significant impact to crypto similar to the launch of BlackRock’s iShares Gold ETF in January 2005, which coincided when gold was trading at $423 per ounce. Today, the price of gold stands around $1,950 per ounce,” says Morehead.
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He stresses that although a variety of economic variables have affected the price of gold throughout time, the introduction of the ETF was a significant element in its ascent.