Dan Morehead, CEO of Pantera Capital, believes that the price of bitcoin could reach a new all-time high within 12 months.
He revealed this in a recent letter to investors, in which he also stated that the current global economic crisis is unprecedented.
In this regard, he wrote:
“I have spent 35 years trading global macro disruptions. This is like no other. This will certainly end the longest global expansion on record. It is likely to have a larger global economic impact than any downturn in recent memory”.
In light of this, he believes that bitcoin may grow in strength, particularly over the next 12 months.
However, it should also be said that Pantera Capital is a fund that invests specifically in cryptocurrency and blockchain companies, and that the CEO’s predictions have turned out to be wrong in the past.
Morehead continues writing:
“Bitcoin was born in a financial crisis. It will come of age in this one.
Now that we’re in the trillions, the deficit just simply has to have a positive impact on the price of things not quantitatively-easable – stocks, real estate, cryptocurrency relative to the price of money. Said another way, the BTC/USD cross-currency rate will rise”.
This process, though, may be neither continuous, nor fast, nor linear and may instead progress in stages, during which large capital investors will explore several new opportunities in the face of the explosion of federal deficits in the US.
This is where the discussion on bitcoin comes to an end:
“The price of bitcoin may set a new record in the next twelve months. It’s not going to happen overnight. My best guess is that it will take institutional investors 2-3 months to triage their current portfolio issues. Another 3-6 months to research new opportunities like distressed debt, special situations, crypto, etc. Then, as they begin making allocations, those markets will really begin to rise”.
This scenario, while it is not clear how likely it could be, seems plausible, because on the one hand, the global economic recession now seems almost certain and on the other, the huge amount of dollars that will be put into the financial markets in the coming months could trigger some new bubble.
In fact, bitcoin is designed to perform at its best in such a scenario, so theoretically at least, it could react accordingly. However, it should be added that during the collapse of the financial markets in mid-March bitcoin showed some correlation.