Wednesday, September 18, 2019

Pantera Capital’s CEO Says the Fundamentals are Stronger This Cryptocurrency Winter

Dan Morehead, CEO at Pantera Capital, an investment firm and hedge fund while on Unconfirmed, an interview with Laura Shin, Forbes’ journalist revealed that the underlying fundamentals are much stronger in comparison to 2014’s cryptocurrency winter. He also outlined that individuals and institutions usually have more interest in the market when bitcoin’s price is on the increase.

Second Cryptocurrency Winter with Stronger Fundamentals

Based on the details of the podcast, Dan Morehead stated that this is the second cryptocurrency winter we are experiencing and the first was around 2014 – 2015. When asked how the current winter differs from the last one, the CEO pointed out that he was worried the first time, thinking if blockchain was going to deliver. There were also regulatory risks to consider.

However, in the current crypto winter, the fundamentals are much stronger. Here, people are not just talking about institutional investments which will bring in more money influence the market, but the foundation has finally been set for it. According to him, Bakkt, Fidelity Investments, and other global investment companies will attract institutional investors into the market through their custody platform. As result, more money is bound to flow into the market.

Institutional Investors are Less Likely to Invest Until Prices Kicks In

Nonetheless, the CEO was quick to note that this will not happen immediately unless bitcoin’s and other altcoin’s price shows a significant improvement. He outlined that there is always a high level of interest in digital assets when the price is on the increase. As such, this goes contrary to the popular opinion of buy low, sell high.

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An instance of this which Morehead pointed out, is when Pantera’s bitcoin fund was offered while bitcoin was only $65, few people were willing to invest. But then, when the price hit around $1,000 in 2013, more people had an interest in the market. The same was said about the low interest in bitcoin when it was worth less than $1,000, but there was a high-level interest when the price finally kicked in.

Pantera Invests in ICOs, Liquid Blockchains, and Ventures

That aside, the CEO pointed out that Pantera is investing in ICOs, Liquid blockchains, and ventures. He also said:

In 2018, they did $19 billion of ICOs and only $4 billion of venture. I think 2019 is going to be the opposite: venture is going to be much bigger than ICOs. Now the pendulum swung back to venture

In addition, Morehead noted that people have the opinion that ICOs were developed in May 2017, but it was actually back in 2013. He also stated that scalability is still a problem for blockchain where about 7 transactions can be carried out a time.

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