“Time To Buy Bitcoin” Says Top Hedge Fund Manager

Avi Rosten
  • Pantera Capital CEO Dan Morehead claims now is the time to buybitcoin as it's flashing a rare buy signal
  • Per his words, bitcoin recently got to the bottom of its bear market

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."

Dan Morehead

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.

BTC.png

 

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.”

Dan Morehead

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.

Morgan Creek Digital's Anthony Pompliano Explains Why He Is So Bullish on Bitcoin

Siamak Masnavi

On Tuesday (February 25), Anthony Pompliano (aka "Pomp"), a co-founder of crypto-focused asset management firm Morgan Creek Digital Assets, gave an interview -- to CNN's Julia Chatterley -- during which he extolled the virtues of Bitcoin.

Pomp focused on two main aspects of Bitcoin:

1. Bitcoin's Proof-of-Work (PoW) Consensus Mechanism and Its Energy Costs

He told Chatterley that Bitcoin is "the most seure computing network" in the world, and "it is going to take electricity or power consumption in order to power that security."

However, he said we don't need to get too alarmed by this since Bitcoin miners are "financially incentivized" to "find the cheapest power sources" because "that's how they make money."

Then, he pointed out that the cheapest form of energy is renewable energy, and so that is what they will try to use to power their mining hardware. In fact, he said that based on the studies he has seen, 60 to 80 percent of the energy being used is renewable.

2. Bitcoin's Store of Value Use Case 

"I think that store of value is really important. You have to have store value before you can have medium of exchange. 

"The store of value comes down to two things. One is security -- it can't disappear, it can't be hacked, etc.; and Bitcoin being the most secure computing network in the world, it is very secure...

"When it comes to price, what you want to see is, over long periods of time, either you're preserving your wealth, so the price stays flat, or it continues to increase.

"The monetary policy of Bitcoin relies on one thing: supply and demand economics -- artificially capped supply, demand increases, price will go up in U.S. dollar terms. And so, again, if you zoom out, over last decade, it's the best performing asset, over the last 12 months, up 150%, in the last you know what six weeks or so, it's up 30% or so.

"It's continuing to do exactly what it's kind of built to do. Now, there's high volatility on an intraday basis... but again people who put their wealth... in Bitcoin have been rewarded very well with this store of wealth thesis. And so we tend to think that the non-correlation with traditional assets will continue to be a valuable kind of aspect of Bitcoin."

Other Bitcoin-Related Topics

Pomp also responded to legendary billionaire investor Warren Buffett's most recent criticisms of Bitcoin by saying that although Buffett is "one of the best investors of all time," when it comes to technology, there are "better people to listen to." 

Finally, with regard to central bank digital currencies (CBDCs), here is what he had to say:

"These central back digital currencies are all coming, and really what I think people need to understand is all of the central back digital currencies are simply taking the existing monetary policy and changing the technology form factor.

"What Bitcoin does is it actually is a different monetary policy. It's not a fiat inflationary type model, and so ultimately we're going to have as a competition of currencies, but it's not going to be a competition on technology...

"We're going to have a competition of monetary policy... We believe that the Bitcoin monetary policy is superior to central bank monetary policies, and ultimately Bitcoin will be the winner, and will be the next global reserve currency."