Pantera Capital: Invest in Crypto with a Multi-Year Perspective

People who invest in cryptocurrencies and tokens should have a multi-year perspective, according to Pantera Capital CEO Dan Morehead. In the long term, the company projects the terminal value of bitcoin to as high as $ 700,000 in five to 10 years if the 3.5 billion people on earth use the digital coin.

Bitcoin has its manic bubbles and losses, but when viewed from a bird’s eye view, it has a constant exponential growth rate, Pantera Capital CEO Dan Morehead said on a conference call Tuesday.

That same morning, bitcoin prices fell below $ 30,000 for the first time in nearly a month.

In fact, the digital coin has fallen about 53% from its all-time highs of around $ 63,000 in April.

In March, Morehead said bitcoin was on track to hit $ 115,000 by August 2021, as skeptics like Ray Dalio predicted a crash.

Today, the cryptocurrency is well below that $ 115,000 forecast, but many market players are still not worried, including Morehead.

“Things change quickly in this space. I think the reasons the markets fell are transitory, ”he said.

Pantera Capital is an asset management company with estimated assets under management of $ 3.1 billion and currently offers a range of investment funds focused on cryptocurrencies and tokens. Its funds provide investors with exposure to the space, ranging from illiquid VC assets like early stage tokens and multi-stage VC equity, to more liquid VC assets like the bitcoin and other cryptocurrencies.

In the latest letter to investors, he said that a convergence of elements had caused blockchain markets to fall sharply, but that “volatility presented a very compelling opportunity,” Blockworks previously reported.

On average, bitcoin has stumbled every year since its inception and achieves a compound annual growth rate of 233%, according to Pantera Capital.

Graph showing the growth of bitcoin prices over time; Source: Pantera Capital

Right now, bitcoin is trading 46% below its 11-year exponential trend, which is important because only 15% of the time in bitcoin’s history has it been this cheap, said. Morehead.

“We like to remind people who invest in tokens that they should have a multi-year perspective, and we like four-year returns because that takes out the crazy eddies of bubbles and bursts,” he said.

According to Morehead, supply and demand determine the price of bitcoin and over time more and more people enter the market, resulting in higher demand and lower supply.

Pantera Capital chart showing the potential terminal value of bitcoin; Source: Pantera Capital

As of December 2020, around 100 million people were using bitcoin, the company said.

Although we are currently in a “bear market, where everyone fears the worst”, there is a potential of 1 billion people using bitcoin by 2022, which could push the price of bitcoin up to $ 200,000, said Morehead. .

With a cryptocurrency market size of $ 1.5 trillion, the industry is still in the early stages of adoption, Pantera noted while projecting bitcoin’s terminal value as high as $ 700,000 in five. to 10 years if the 3.5 billion people on earth use digital technology. piece of money.

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