The situation on the crypto market opens up good prospects for the future of Bitcoin

The head of the cryptocurrency hedge fund Pantera Capital Dan Morehead (Dan Morehead) believes that we all need to calm down about the current cryptozymes. He stated this in an interview with the leading podcast Unconfirmed Laura Shin (Laura Shin).

Morehead reminded the audience that the cryptobranch experienced similar periods of the bear market before, and the current market situation offers good prospects for the future Bitcoin and blockchain .

“In fact, this is the second cryptozyme. In 2014-2015, we have already observed such a period. In the previous cryptozyme, I was more worried about whether the blockchain would work. There were also real regulatory risks. In the current situation, the fundamentals are much stronger than they were in the 2014-2015 cryptozyme, ” said the head of Pantera Capital.

According to Morehead, the Pantera Capital Fund makes investment decisions based on the prospects for five to ten years, so its strategies are not affected by daily price fluctuations.

The expert is confident that institutional investors will eventually come to crypto markets. However, he acknowledged that the current price drop keeps them from taking this step.

“Talks about the impending wave of institutional capital that will come to crypto markets have been going on for years. I think that now we have the necessary conditions for this to happen. Institutional investors want a well-known and regulated custodial service. And we really did not have this in the past , ”said Morehead.

In his opinion, in order to attract large investors to the market, custodial services of the institutional level are needed, and they are already emerging – Bakkt and Fidelity are actively working in this direction.

Since institutional investors are not risk averse, they will not start betting on Bitcoin until the price rises. They take a different approach than “buy cheaper, sell more expensive,” said Morehead.

Since world-class investors have a herd mentality and need external clues about when to invest in an asset, it is not worth expecting that they will invest big money in cryptocurrency before prices start to rise.

“It is likely that a large wave of institutional capital will not come until prices start to rise. We observed this in the two previous cycles. Cryptorinka even more extreme than normal. The inflow of funds into our bitcoin fund was largely pro-cyclical , ”Morehead said.

“We launched the fund when Bitcoin was worth $ 65. Until the price reached $ 400 or $ 500, only a few investors came. Then, when the price rose to $ 1,000 in 2013, we received a huge influx. And when cryptozyme reigned in the market in 2014-2015, it dried up, ” he added.

Since currently Bitcoin is in a long-term bearish trend, it is quite understandable why many investors “sit aside” and wait until conditions improve.

When asked how regulatory uncertainty affects the industry, Morehead noted that the United States Internal Revenue Service (IRS) and Commodity Futures Trading Commission (CFTC) have already outlined their position by publishing appropriate statements. At the moment, the main delay is related to the Securities Commission (SEC).

“The SEC is now in the process of determining what standards need to be set regarding what to count and not count as securities. In the next 6-9 months this will be decided. As soon as the situation clears up, it will be easier for investors and stock exchanges to learn how to handle these types of assets , ”said the head of Pantera Capital.

Recall that in December, the famous American venture capitalist Jim Breyer (Jim Breyer) said that cryptocurrency is close to the transition to the state of "nuclear winter". Despite this, he is optimistic about the future of technology.

Publication date 04.02.2019
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