Bitcoin price is still on track to hit record highs this year, according to Dan Morehead, founder and CEO of Pantera Capital. During a podcast interview with Unchained, Morehead explained the massive growth potential.
“Graph the price of bitcoin logarithmically and its trend has been to grow at 235% compound annual growth rate. That puts BTC at $42,000 at the end of 2019. I think it’s a good shot that at the end of the year we hit that.”
He sees the trend continuing,
“If you just extrapolate that (logarithmic) line out, for another year it’s $122,000 for BTC and in one more year $356,000.”
Morehead admits that it sounds crazy. But he mentions how when the price of bitcoin was $100, he predicted it would go to $5000 and everyone thought he was “nuts.”
If Morehead truly is “nuts” for his current predictions then he won’t be alone in the psych ward.
Bitcoin Price Has No Shortage of Bullish Predictions
Former IBM executive, Jesse Lund, predicted bitcoin would eclipse $1 million in our lifetime. Wences Casares, a member of PayPal’s board of directors, sees bitcoin price surpassing $1 million in the next “seven-to-ten years.” Meanwhile, “crypto genius,” James Altucher says if we reach mass adoption, bitcoin will soar to over $8 million a coin.
While Morehead warns people against using price as a proxy for bitcoin, he says when you zoom out, the price is always going up.
“For our own fund history, we’ve only had one down year in six years.”
Institutional Money Will Fuel Bitcoin’s Rise
The influx of institutional money is one of the key factors for positive price predictions. As Fidelity and Bakkt gear up to launch their institutional-grade platforms, many see bitcoin price rising with them. Morehead says more institutional investors are finding their way to Pantera Capital.
“In the early days, it was Wall Street or tech professionals investing their own money in our funds. We’re starting to see that transition to more institutional investors, pensions, endowments but that’s a relatively slow change.”
“If 95% of institutional investors don’t have any direct exposure to blockchain, you just need 5 or 10% of those to make an allocation over the next couple to years to push the prices higher. You’re going to see most institutions take a look and 5, 10, 15% of them are going to make commitments.”
He adds that 5% institutional ownership is a “massive amount of money.”
Use-Cases Still Have Room to Improve
Joey Krug, co-chief investment officer of Pantera and founder of Augur, who joined him on the podcast, admits that while bitcoin price is bullish, it still has a ways to go.
“The tech is so new, it’s like the Internet in the late 80s, very very early 90s. It’s really hard to do lots of things people want to do.”
He goes on to say that the use cases that have worked so far aren’t sensitive to price.
“The only use-cases that have worked so far are collateralized loans or peer-to-peer lending.”
He says the reason for this is the lack of throughput, cost, and scalability. It’s just a matter of time before these issues are solved.
“There are solutions (to scalability) on paper that make sense, they should be able to be implemented. At this point, the software is just being written.”
Libra Could Become a Reserve Currency
Morehead seemed bullish on Facebook’s new digital currency, Libra. While many regulators have scoffed at the coin, Morehead believes they did a “clever ting” by making it a basket of currencies. By distributing the value between different currencies, it will reduce volatility. Morehead even goes so far as to say that it could become the next reserve currency.
“ The reserve currency has shifted 4 or 5 times over the last five centuries.
You could imagine something like libra, a basket token, ultimately becoming a place that countries can store wealth in.”
Krug maintains his conservative stance, saying that Libra has a “long way to go” and is only about 10-15% finished.
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Last modified: March 4, 2021 2:38 PM