Yesterday Pantera Capital sent a letter to investors to talk about the current situation caused by the Coronavirus pandemic and how it has impacted traditional markets as well as the price of Bitcoin (BTC).
My kids used to count to 100, “One, two, skip a few, a hundred.” Seems like we’re doing that on Quantitative Easing. QE1, QE2, skip a few, a hundred.
I believe it’s close to inevitable that this will be very positive for cryptocurrency.#BuyBitcoinhttps://t.co/mMPhVBzpBs
— Dan Morehead (@dan_pantera) May 4, 2020
The letter immediately opens with a summary of what has been the performance in recent months of various financial instruments: in the last place, with a drop of 68%, there is oil, while as far as positive data are concerned there is Bitcoin in the first position with a +23%. BTC outperforms its physical rival, gold, which stopped at +13%.
The letter continues with a comparison with what happened in the past with the previous crisis of 2008 and it is emphasized that this one we are experiencing will not follow the same pattern but will be much worse than imaginable: in fact, Pantera Capital explains that the virus is already having catastrophic effects on the global economy that will have consequences for decades and maybe even for over 100 years, as claimed by Ken Rogoff, an economist at Harvard:
“I feel like the 2008 financial crisis was just a dry run for this. This is already shaping up as the deepest dive on record for the global economy for over 100 years,” he said. “Everything depends on how long it lasts, but if this goes on for a long time, it’s certainly going to be the mother of all financial crises.”
The charts seem to support this thesis, showing how the traditional market is suffering and for this reason invites to invest in blockchain and crypto assets, which are considered the new gold.
“Time to allocate some to the gold of this millennium.”
Another factor that is mentioned in Pantera’s letter is the halving of bitcoin, showing the related logarithmic charts from which it is possible to deduce the pattern that the price of the asset could undergo as a result of the event which is just a week away.
A Pantera prediction on the price of Bitcoin
Finally, the letter ends with a prediction of the price of bitcoin at over $114 thousand dollars, and it is pointed out that for some it might be a crazy figure but it is remarked that several years ago it seemed crazy to see bitcoin at $5 thousand dollars.
