Dan Morehead says digital assets will become more attractive as the Federal Reserve moves to increase interest rates from next month.
The CEO of Pantera Capital is predicting that the correlation between Bitcoin and the S&P 500 will end soon — and argues that cryptocurrencies are a safer bet for investors than stocks.
Dan Morehead says "blockchain is the best relative asset class in a rising rate environment" — and digital assets will become more attractive as the Federal Reserve moves to increase interest rates from next month.
He believes that these rate hikes will make equities and real estate less attractive — and "bonds are going to get crushed as the Fed goes from the only buyer on Earth to seller." In a newsletter posted on Pantera's website, he added:
"So, where does one invest when both stocks and bonds are falling? (Normally they are negatively correlated.) Blockchain is a very legit place to invest in that world."
Is He Right?
A number of analysts who can be relied on for a bullish perspective about Bitcoin feel the same way.
One of them is Bloomberg Intelligence's Mike McGlone.
Since the start of the year, he has warned that Bitcoin and the stock markets will both experience sell-offs as the Fed "takes away the punch bowl." However, McGlone believes BTC is in a stronger position because it has already suffered two corrections, while the S&P 500 hadn't experienced a steep decline since the early days of the coronavirus pandemic.