Pantera Capital Considers Exiting Bitcoin Holdings

The founder of Pantera Capital expects several more defaults of crypto companies in the near future – similar to the story of Three Arrows Capital.

Dan Morehead said he expects a “big collapse” to come in the next two months:

“The fall of Terra is a clear illustration of the instability of the industry and its economic system. Even companies actively hedging their corporate risks are not immune from instability. For example, Celsius or Three Arrows Capital are struggling and unable to repay their debts. There will most likely be a couple more such bankruptcies in the next month or two, with each bankrupt debtor firm creating big problems for its creditors.”

Dan Morehead is sure that it is too early to say that the crypto industry has reached the bottom. Therefore, his company is thinking about exiting bitcoin funds in advance and is going to focus on investing in relatively risky altcoins with higher profits.

Another reason that may affect the change in investment preferences of Pantera Capital, Morehead called the strengthening market correlation between bitcoins and securities. In his opinion, the position of the US Federal Reserve and the change in the key interest rate could become a trigger for the crisis of the cryptocurrency industry, and, in this context, bitcoin convincingly demonstrates its connection with company stocks.

In April, Pantera Capital announced that it had raised $1.3 billion for its Blockchain Fund, which will invest in Web3 startups, early-stage tokens, and tokens with established liquidity levels from 2023.