By Josiah Wilmoth
A cryptoasset hedge fund manager who accurately predicted the recent bitcoin price decline now says that he believes the markets are poised for a comeback.
Bitcoin Price Primed for Surge, Predicts Hedge Fund Manager Who Called the Dip
On December 19, 2017 — two days after the bitcoin price reached its present all-time high — Pantera Capital founder and CEO Dan Morehead warned that the markets were likely to see an imminent 50 percent correction.
Morehead, a former Goldman Sachs equities trader, was right, and the Bitcoin price soon fell from $18,200 to a present value of $8,883, and other cryptocurrencies experienced comparable retreats.
Now, though, Morehead says the markets are primed for a surge.
“It seems like another couple of weeks and everything will be normal and [bitcoin] can start growing back up again,” he said during an interview with CNBC.
He explained that throughout the industry’s history, bear markets have lasted an average of 71 days, and that “while the past doesn’t predict the future, this seems like the right downdraft.”
As of the date that this article was written — Feb. 13 — the market was 57 days into that cycle, leaving just fourteen days before the historical trend indicates that cryptoassets should begin to surge.
‘A Pretty Wild Circumstance’
Morehead, whose cryptoasset hedge fund has returned more than 22,000 percent since its inception in 2013, said that the coming rally will likely see the first significant engagement from institutional investors, enabling the Bitcoin price to achieve a new all-time high in 2018.
“There’s such an institutional appetite to get exposure to this. It’s a half-a-trillion-dollar asset class that nobody owns. That’s a pretty wild circumstance,” said Morehead. “And bitcoin is still so underowned by institutional investors that it trades at its own beat,” he said, explaining that it has just a 0.1 percent correlation to equities.
Morehead added that he believes that, at least in the US, regulators have “done an excellent job” overseeing the nascent markets, which has contributed to increased interest from institutional buyers.
“A little more regulation would be helpful,” he concluded.
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