The Pantera Capital report pointed out that Bitcoin prices will not rise too much in the future.
The Bitcoin market's trend of plummeting more than 80% after experiencing a strong bull market may come to an end.
A new report released by Pantera Capital, a California-based hedge fund, came to this conclusion. Specifically, the report pointed out that the recent decline in Bitcoin prices has not been as severe as in the past.
For example, in 2013-15 and 2017-18, Bitcoin plummeted by 83% after reaching a peak of nearly $1111 and $20,809 respectively. Similarly, Bitcoin's bull market in 2019-20 and 2020-2021 led to large-scale price corrections. Nevertheless, their subsequent corrections were -61% and -54% respectively.
Dan Morehead, CEO of Pantera Capital, emphasized that after the bear market cycles of 2013-15 and 2017-18, selling sentiment continued to decline, and pointed out that the decline in the future bear market will be "smaller." He explained:
"I have always believed that as the market becomes wider, more valuable, and more institutionalized, the magnitude of price fluctuations will ease."
These statements came as Bitcoin resumed its bullish momentum and retested its current record high of close to $65,000.
Following the approval of the first Bitcoin exchange-traded fund (ETF) after the US Securities and Exchange Commission (SEC) has rejected similar investment products for several years, BTC/USD has exceeded US$60,000 for the first time since the beginning of May.
ProShare's Bitcoin strategy ETF was approved, raising expectations that it will make it easier for institutional investors to gain exposure in the Bitcoin market. As the price of Bitcoin doubled and returned to a level above $60,000, it also helped Bitcoin erase almost all losses in the bear market cycle from April to July.
BTC is undervalued?
As Bitcoin became a mainstream financial asset after the first ETF was approved, it has become more and more common to hear a valuation of $100,000.
Morehead cites the popular S2F model, which studies the impact of Bitcoin’s “halving” event on prices, to rule out a similarly bullish outlook for Bitcoin. He pointed out that the first halving reduced the issuance rate of new bitcoins by 15% (about 10.5 million BTC), resulting in a 9212% increase in bitcoin prices.
Similarly, the second halving reduced the supply of new bitcoins by a third (approximately 15.75 million BTC). This resulted in an increase of 2910%, which was almost one-third of the previous time, so the impact on the price of Bitcoin was small.
The last halving was on May 11, 2020, which further reduced the number of new bitcoins relative to the circulating supply. Since then, bitcoin has risen by more than 720%.
Morehead said: "On the other hand, we may not see a 100-fold increase in a year," and added:
The logarithmic display cycle makes me feel that today's price is very cheap.
(The information provided only represents personal views and is for reference only!
And does not constitute any investment and financial advice. Readers, please establish correct currency concepts and investment concepts, and earnestly improve risk awareness)
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