A prominent hedge fund CEO believes Bitcoin is flashing a perfect buy signal. Dan Morehead, chief executive of Pantera Capital, believes the cryptocurrency’s rapid growth in the past five years means its current price is ideal as it got below its 200-moving average (MA).
Speaking to CNBC’s “Fast Money”, Morehead explained how the coin has grown 165 percent per year since the crypto-hedge fund’s start, and added:
"Something that's growing that fast hardly ever gets below its 200-day moving average. When it does, it's a very good time to buy."
While Bitcoin’s stellar 2017 produced 25,000 percent returns for Pantera as of December – with the price rising to heights of nearly $20,000 -2018 has seen the price drop substantially. Bitcoin, at the time of writing, is trading at $8,237 according to CryptoCompare.
With its cryptocurrency fund managing over $800 million in assets, Morehead believes that now is a “rare opportunity” to buy BTC while its price is still relatively low.
Pantera Capital’s General Outlook
Morehead’s latest Bullish sentiments come after the fund’s April newsletter - published on Medium -where he affirmed his belief that the worst is over for the cryptocurrency.
Contending that the then price of $6,500 was likely the low of the current bear market, Morehead encouraged a longer-term perspective on the coin’s fate, insisting that investors should be concentrating on a 3-5 year horizon.
Attributing some of the early 2018 sell off to the need for crypto investors to pay taxes on their 2017 capital gains, Morehead was also keen to deflect potential objections to the fund’s Bullishness:
“For those who are new to Pantera who might think a fund manager like Pantera would always be saying “Today’s a great day to get long,” we’ve only made four cryptocurrency trade recommendations in seven years: three buy recommendations and one sell/it’s-going-to-go-sideways-for-a-while.”
This latest optimistic perspective is by no means unique following the market drop of the last few months, with notable figures such as Tim Draper - billionaire founder and manager of venture capital firm Draper Fisher Jurvetson – recently expressing his optimism and expecting the price of BTC to hit $250,000 by 2022.
Wall Street analyst Tom Lee, who’s a known bitcoin bull, also expects bitcoin’s price to soar. As reported, Lee’s bitcoin price target for March 2020 is of $91,000 per coin.