Bitcoin is already in its ‘next bull market cycle’ – Pantera Capital
BItcoin (BTC) is beginning its “seventh bull cycle” and investors should not be afraid of crypto post FTX, Pantera Capital believes.
In his latest “Blockchain Letter” on February 8, the asset management firm’s CEO, Dan Morehead, predicted that 2023 would be a “year of rebuilding trust.”
Morehead: Cryptoassets have ‘seen the lows’ this cycle
With BTC price action pulling back a bit after gaining 40% in January, some market participants are still insisting that new macro lows are coming across cryptoassets.
Although the timing of such a scenario varies, consensus remains absent as to how the market will recover.
For Morehead, however, the time to turn bullish on crypto is already here.
“Pantera has been through ten years of bitcoin cycles, and I’ve traded through 35 years of similar cycles,” he noted.
“I believe that blockchain assets have seen their lowest levels and that we are in the next bull market cycle – regardless of what happens in the interest rate sensitive asset classes.”
That perspective differs from the majority by putting aside the debate about crypto price correlation with risky assets like stocks. This, as Cointelegraph continues to report, forms the backbone of some other forecasts for 2023.
Morehead argued that the decline from Bitcoin’s recent all-time highs has placed the market well within historical context, despite falling below its previous bull market all-time high after the FTX debacle began.
“The decline from November 2021 to November 2022 was the median of the typical cycle. This is the only bear market that more than completely wiped out the previous bull market. In this case give back 136% of the previous rally,” he wrote along with the accompanying data.
“The median decline has been 307 days and the previous bear market was 376. The median decline has been a -73% downdraft and the last bear market ended at -77%.”
Going forward, a trend change will follow, with Bitcoin on its way to new record highs.
“I think we’re done with that and starting to grind higher,” Morehead added.
A “jurisdiction-by-jurisdiction” recovery
Similar optimism, meanwhile, was directed at the DeFi space, with Pantera nonetheless positioning itself for a year of “rebuilding trust” in centralized finance (CeFi) first and foremost.
Related: Bitcoin price hits 3-week low as SEC fears liquidation of $250 million in crypto loans
This would be necessary, Morehead argued, in light of last year’s many corporate failures, which triggered the crypto bear market.
“2022 was a year of booms and busts, especially when it comes to CeFi. In a matter of months, the world saw Three Arrows Capital collapse, Do Kwon’s LUNA disintegrate, Voyager Digital go bankrupt, and Sam Bankman-Fried’s (SBF) FTX- empire crumbles,” he explained.
“What did all these events have in common? The headlines tend to suggest that it was crypto or Web3 that failed. But in fact it was a combination of bad actors crossing the lines in jurisdictions without clear rules. If 2022 was the year to break the rules and fail, I believe 2023 is the year where entities instead follow the rules and enjoy the rewards of doing so.”
Although the letter did not mention the current regulatory battle involving the United States Securities and Exchange Commission (SEC), it predicted that CeFi would regain its influence worldwide “on a jurisdiction-by-jurisdiction level.”
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
