Pantera Capital CEO Dan Morehead told investors halvings are growing less important and a more mainstream Bitcoin market will moderate price swings.
As the Bitcoin market expands beyond the cryptocurrency community into the mainstream, the era of halving cycles and huge bull and bear markets is ending, venture capitalist Dan Morehead predicted.
In his October 6 investors note, the CEO and co-chief investment officer of Pantera Capital said that he felt the May 2020 halving cycle had run its course, and a new bull market had arrived.
Noting that the reduction in the supply of new bitcoins compared to the number already minted dropped with each halving, Pantera said:
“Each subsequent halving’s impact on price will likely taper off in importance… I believe we are done with the four-year halving cycle – and on to the next price era.”
More broadly, Pantera said he believes Bitcoin’s cycle of highs and lows will no longer be as dramatic. He said:
“I long advocated that as the market becomes broader, more valuable, and more institutional the amplitude of price swings will moderate.”
Pointing to the bear markets that bottomed out in January 2015 and December 2018, Pantera said that he believes the 83% price declines both showed “are a thing of our primordial past. Future bear markets will be shallower.”
That said, the 100x price gains of the bull markets that topped out in April 2013 and January 2015 are also likely a thing of the past, he said.
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
Sell the Fact
Pantera also noted that the old Wall Street saying “Buy the rumor, sell the fact” was “definitely working in our space.”
Crediting former Commodity Futures Trading Commission Chairman Chris Giancarlo, Pantera pointed to a pair of long-awaited events:
“All during 2017, the markets were rallying with the mantra 'When the CME lists Bitcoin futures, we’re GOING TO THE MOON!!!'
The very day that happened, the Bitcoin market ended a long rally up 2,440%. He said:
“That was the top. One of those -83% bear markets started that day. We recently repeated that cycle. The whole industry reveled in Coinbase’s upcoming direct listing. The Bitcoin market was up 822% coming into the day of the listing. Bitcoin peaked at $64,863 that day and a -53% bear market started.”
He concluded:
“Will someone please remind [me] the day before the Bitcoin ETF officially launches? I might want to take some chips off the table.”
The next day, October 7, the SEC took a baby step, approving the Volt Equity ETF which offers investors to companies that hold more than half their assets in Bitcoin, and those that bring in more than half of their earnings by mining, lending, or transacting in BTC.
But the fate of a Bitcoin futures ETF of physically settled Bitcoin ETF remains to be seen.
