The CEO of a hedge fund that’s up 41,960% says it’s time for a bitcoin rally – here’s his outlook

Pantera Capital CEO Dan Morehead says Bitcoin (BTC) has reached an inflection point after enduring a prolonged bear market.

In a new update, Morehead says that after the collapse of Terra and crypto exchange FTX, the industry has felt enough pain to prepare for a bull market.

Says Morehead

“Having traded market cycles for 35 years, I have learned that markets can only be negative for a finite amount of time. Investors can only endure so much pain. It’s been a full year since TerraLUNA/SBF/etc. It was enough time. We can collect ourselves now.”

According to the CEO, digital assets have decoupled from traditional markets, so future weakness in stocks or bonds may not matter as much to crypto as many analysts believe.

“Blockchain has become massively decoupled. It’s just hard to notice right now.

For most of the history of blockchain assets, there has been virtually no correlation to risky assets. Using Bitcoin as a proxy for the blockchain, its correlation with the S&P 500 was 0.03 over its first nine years of existence. That was an important part of the argument: when you can find a new asset class with incredibly high historical returns and virtually no correlation to typical assets, that’s the dream investment.

Unfortunately, all of the overly indebted centralized entities and suspected criminal Sam Bankman-Fried in our space have caused the correlation to skyrocket, peaking at 0.76 over the past year. Since blockchain is not tied to interest rates in any way, it should have very low correlation to major asset classes (stocks, bonds, real estate), all of which are heavily driven by interest rates. Bitcoin’s correlation to the S&P 500 is back below 0.1.”

In statistics, a correlation coefficient of one indicates that assets are very likely to move in parallel. Conversely, a correlation value closer to zero indicates that there is a minimal linear relationship between assets.

Morehead says Pantera, which he believes is up 41,960% since inception, is anticipating a catalyst that will catapult Bitcoin to new heights.

“There is something that could be even better than the Pantera Bitcoin Fund for some types of investors: a BlackRock ETF (Exchange Traded Fund).

If approved, we anticipate a significant impact on cryptocurrencies, similar to the launch of BlackRock’s iShares Gold ETF in January 2005 when gold was trading at $423 an ounce. Today the price of gold is around US$1,950 per ounce. Many economic factors have influenced the price of gold, but the launch of an ETF certainly played a crucial role in its rise.”

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Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct their due diligence before making any risky investments in Bitcoin, cryptocurrencies or digital assets. Please note that you transfer and trade at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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