Dan Morehead, head of a large cryptocurrency hedge fund Pantera Capital, said that the decline in cryptocurrency rates and panic in the market makes it possible to buy bitcoins.
Dan Morehead, CEO of a large cryptocurrency hedge fund Pantera Capital, said that the decline in cryptocurrency rates and panic in the market makes it possible to buy bitcoins.
In his monthly letter to investors, Morehead emphasized the need to buy cryptocurrencies, and any other assets, when the markets are “below trend.” If you look at Bitcoin, now is a great time to buy – BTC has been so “cheap relative to the trend” only 20.3% of the time in its entire history. Morehead also noted that even a significant increase in bitcoin in the last year does not mean that the asset is overvalued:
“YoY earnings have not really peaked as they have seen in past bullish cycles. Profit is now 281% year-on-year and looks completely normal given the amount of cash printed by central banks during that time. ”
The fall in bitcoin was influenced by various fundamental factors, including a possible ban on mining in China. However, as Morehead recalled, this is far from the first time that rumors about the ban of cryptocurrencies in the Celestial Empire have appeared. He counted at least eight cases in which the Chinese authorities took steps against the cryptocurrency industry.
Also, according to the CEO of Pantera Capital, one of the factors behind the depreciation was the tax payment period in the United States – many traders liquidated their positions before paying taxes. He recalled that in previous such periods, the bitcoin rate was noticeably sagging. Morehead noted the reports of Elona Musk as another factor in the depreciation, but did not go into details.
Recall that in mid-April, the cryptocurrency market capitalization reached $ 2.5 trillion, and the bitcoin rate exceeded $ 60,000.However, then a rather sharp drop to $ 30,000 followed. Now the BTC rate has recovered slightly and the first cryptocurrency is trading at $ 39,000.
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