Midway through 2013, when the bitcoin price was trading at $104, cryptocurrency hedge fund Pantera Capital published an investor letter that made what at the time seemed to be a moonshot prediction: The bitcoin price, the firm said, will one day hit $5,000.
Five years on, a $5,000 bitcoin price target is considered bearish, and Pantera’s bet has, to put it lightly, paid off handsomely.
Writing in the July edition of the firm’s monthly “Blockchain Letter,” Pantera founder and CEO Dan Morehead revealed that, even after the recent bear market, the cryptocurrency hedge fund now has a lifetime return of 10,136.15 percent net of fees and expenses — not bad for a fund that has only been operational for five years.
That’s not to say every cryptocurrency hedge fund has been quite so successful. Many, as CCN.com reported, opened up shop during the parabolic market rally that occurred during Q4 2017, only to face massive headwinds during the first few months of the new year. The number of cryptocurrency funds now stands at a record 312, but several smaller funds have found themselves unable to stay afloat during the present bear market.
Commenting on bitcoin’s bull and bear cycles over Pantera’s five years of existence, Morehead noted that — contrary to the cryptocurrency’s linear price movements — BTC has experienced very consistent logarithmic growth since 2010.
Unlike linear charts, which measure an asset’s value in pure dollar terms, with equal distance between price levels, logarithmic charts plot data such that there is equal distance between equivalent percentage changes.
By this metric, bitcoin is far less volatile than its reputation, and its long-term trend line, Morehead said, suggests that the bitcoin price will end 2018 trading near $21,000 — a new all-time high — and break out to $67,500 in 2019.
Of course, Morehead’s bitcoin price predictions haven’t always hit the mark. Earlier this year, for instance, he jumped the gun on forecasting that BTC was preparing to emerge from its current bear market. Nevertheless, betting against him has not proven to be a profitable strategy over the long-term.
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Last modified: March 4, 2021 4:05 PM