Pantera Capital CEO Dan Morehead cautioned, in distinction to many crypto bulls, that the beginning of a bitcoin exchange-traded fund (ETF) could not lead to a rally for the cryptocurrency.
“Will somebody please remind the day earlier than the bitcoin ETF formally launches?” Morehead wrote in an investor letter on Oct. 6. “I’d need to take some chips off the desk.”
Morehead identified that the Wall Street adage “purchase the rumor, promote the actual fact” is at present enjoying out within the crypto business. He highlighted how bitcoin rallied over 2,400% earlier than the day that bitcoin futures have been listed on the Chicago Mercantile Exchange in 2017, adopted by an 83% bear market .
This yr, the bitcoin market rose 822% coming into the day of Coinbase’s Nasdaq itemizing, peaking at $64,863 that day after which beginning a 53% bear-market droop, Morehead wrote.
Morehead’s feedback come after analysts and buyers lately attributed the rally in bitcoin to hypothesis that the U.S. Securities and Exchange Commission (SEC) will quickly approve a bitcoin ETF. The SEC final week accredited the Volt Crypto Industry Revolution and Tech ETF, which goals to present buyers with publicity to publicly traded firms with publicity to bitcoin.
Many within the crypto neighborhood have speculated that, regardless of delays, the approval of a bitcoin ETF may occur by the tip of the month. SEC Chair Gary Gensler has additionally repeatedly advised that he’s not opposed to the thought of a futures-based bitcoin ETF like these proposed by Valkyrie and BlockFi, which filed for a bitcoin futures ETF on Friday.
Morehead, whose Pantera Capital crypto fund had $four.7 billion in property beneath administration as of August, additionally argues within the letter that bitcoin is now in a bull market.
“We had a interval of short-term madness – the place Chinese mining bans have been thought to be destructive and some folks had blockchain ESG the other way up – and now we’re in a brand new bull market,” Morehead wrote.
Morehead has argued that bitcoin value swings will average because the cryptocurrency positive factors broader institutional acceptance, predicting that future bear markets shall be shallower than prior to now.
”Unfortunately, there’s no free lunch,” Morehead wrote. “The flipside is we in all probability received’t see any extra of the 100x-in-a-year rallies both.”