Pantera Capital: Bitcoin Price Will Reach $67,500 by End of 2019

Siamak Masnavi

On Friday (27 July 2018), blockchain-focused investment firm Pantera Capital Management revealed via a blog post that Pantera Bitcoin Fund had generated a return of 10,136.15% (net of fees and expenses) over the past five years; it also said that it expected the Bitcoin (BTC) price to reach $67,500 by the end of 2019.

Pantera was founded in 2013 by former trader and hedge fund manager Dan Morehead, who is the current co-chief investment officer and CEO. It has over $700 million in assets under management (across two venture funds and four cryptocurrency funds).

Pantera's Bitcoin Fund had its five-year anniversary this month. So, the firm thought it would be interesting to share, via two emails sent out to investors by the CEO in 2013, the basis for its original (and still going strong) belief that Bitcoin would become a global currency and revolutionize how we deal with cross-border payments. Below, we highlight a few key sections from these two emails (we have used bold face used for emphasis).

Email Dated 21 August 2013 (With Bitcoin at $104.48)

  • "I wanted to share my strong conviction that bitcoin is about to melt-up... I believe bitcoin will explode through $200 within the next 6–8 weeks."
  • "I was discussing bitcoin with an investor yesterday and he replied somewhat dismissively “It’s just like buying gold”. No, it’s like buying gold in 1000 B.C. 99% of the financial wealth has yet to address bitcoin. When they do, bitcoin is either going to be worth zero or $5,000 /BTC."
  • "It’s the first global currency since gold."
  • "It’s the first borderless payment system ever."
  • "If you plan to invest/invest more in bitcoin, it’s my opinion that 'now' is better than 'later'."

Email Dated 6 November 2013 (With Bitcoin at $253.69)

  • "I helped our Pantera Bitcoin Fund execute a million dollars overnight. The buying pressure on bitcoin was intense. Bitstamp’s 30-day volume is 4x what it was in July. Their overnight volume set a new record $13mm — 10x a typical day in a few months ago."
  • "In my opinion, it’s like deciding whether to buy Microsoft back in the day at $0.20 a share. It was hard to do when the stock was just at $0.10. In the fullness of time…clearly a great trade. I believe bitcoin right now is just like that."
  • "Now that Silk Road is gone, a new wave of sophisticated investors are entering. It feels like it’s happening. A melt-up which could be orders of magnitude."

Bitcoin Price History

Pantera says that if we look at a chart that plots Bitcoin's price since July 2010 in log scale, we would see that the Bitcoin price shows "very consistent exponential growth":

Pantera chart.png

Pantera says that projecting price through the end of 2019 using the historical trend line (shown in gold) would lead us to expect a BTC price of $21,000 by the end of 2018, and $67,500 at the end of 2019, and that, in fact, these are their current forecasts for Bitcoin.


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Bitcoin’s Being Used as ‘Currency Hedge’ in Pure Speculation, Says CNBC's Brian Kelly

Francisco Memoria

CNBC contributor Brian Kelly, the founder and CEO of crypto investment firm BKCM, has argued bitcoin is being used as a hedge against economic uncertainty but as “pure speculation.”

Commenting on a buy signal pointed out by a Goldman Sachs sales and trading desk, Brian Kelly revealed that while he likes the call he is “concerned about the bitcoin market” as the number of BTC addresses hasn’t been growing.

Per the analyst bitcoin “has been trading right with gold for the first time” since he started covering the cryptocurrency back in 2013.  This, he said, means bitcoin is now being used as a currency hedge by macro players and other investors, even though at this point it’s “pure speculation.”

The analyst then added that we’re currently seeing a “perfect storm” for bitcoin as there are multiple fiat currencies “breaking down at the same time,” and institutional investors are now starting to embrace cryptocurrencies.

These two combined, he added, “funneled all the money into bitcoin” helping the flagship cryptocurrency outperform other assets so far this year. In December of 2018 BTC was trading at about $3,200, and has been rising this year to a current $10,980.

Kelly was likely referring to the Argentine peso and the Chinese yuan when he mentioned declining fiat currencies. As covered the peso recently plummeted after the country’s President Mauricio Macri suffered a defeat in the weekend’s primary elections, leading to speculation a bitcoin premium was developing in the country.

The yuan, on the other hand, dropped to an 11-year low as China devalued its currency to offset the impact of tariffs imposed on the country by the Trump administration. Amid fears of a trade war escalation equity markets plummeted, and bitcoin started rising.

Back in April, Kelly explained why he believed bitcoin was headed for a new all-time high, pointing to solid fundamentals he argued were behind the cryptocurrency’s rise this year.