Pantera Capital: Bitcoin has entered its seventh bull cycle

Bitcoin has entered its seventh bullish cycle from a historical context, according to a new report published by Pantera capital. This perception may come as a comfort to investors, as the decade-old firm is one of the earliest and largest institutional investors in the cryptocurrency and blockchain industry, having made investments in companies such as Bit stamp, Bitmain, Circleand Chain. The firm also manages a number of cryptocurrency hedge funds, giving clients access to a diversified portfolio of digital assets.

The author of the report, Pantera Capital CEO Dan Morehead, has invested in Bitcoin for the past 10 years, during which there have been six different up and down cycles. The fund has invested in “four crypto winters”, states Morehead in the report. This track record of investing in multiple boom/bust cycles suggests the firm has a good grasp of the technical and fundamental dynamics affecting the market.

In the following chart, Pantera Capital presents a chart of why Bitcoin is at a cyclical bottom. The chart concludes that from both a duration and overall decline perspective, Bitcoin appears to be based on historical norms. Of course, it is possible that price measures deviate from these norms given the huge regulatory changes coming from regulators. But on the face of it, it is a fairly reassuring chart in conjunction with the recent rally from the 2-year low.

As we can see, the decline in Bitcoin from November 2021 to November 2022 was the median of the typical cycle – although this was the only bear market that completely wiped out the previous bull market, giving back 136% of the previous rally. The median length of the move has been 307 days, while the previous bear market lasted 376 days. The median decline is -73% and the last bear market ended at -77% decline.

During the last comparable decline between December 2017 and December 2018, Bitcoin “only” lost 84% of its value.

Bull Run, just getting started?

While Bitcoin has recently emerged from a nasty multi-quarter bearish mark, Pantera Capital presents data that suggests this new bullish impulse may have some way to go — at least from a historical context.

Pantera data from past bull cycle runs talk about an average increase of 40x and weighted average increase of 4x. Despite the recent surge above $24,000, the Bitcoin price had only increased approx. 2 times from the lowest. At the time of publication, the price of Bitcoin was $21,553/BTC, according to Coindesk.

The mean and weighted mean are two statistical measures of central tendency used to describe the average value of a set of data.

The average, also known as the average, is calculated by adding all the values ​​in a data set and dividing by the number of values. While the weighted average takes into account the importance or frequency of each value in the data set. This is done by multiplying each value by a weight (representing its frequency or importance) and then dividing the sum of all the weighted values ​​by the sum of all the weights.

In closing, Pantera Capital CEO Dan Morehead maintains a positive outlook for investors by saying:

“I think we’re done with that and starting to paint higher. I believe that blockchain assets have seen the lows and that we are in the next bull market cycle – regardless of what happens in the interest rate sensitive asset classes.”

If so, investors should expect Bitcoin to be firmly entrenched in its seventh bull cycle – destination unknown.