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.

 

Featured Image Credit: Photo via Pexels.com

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Bitcoin’s Decentralization Stands out as Hashrate Hits 74.5 Million TH/s All-Time High

The Bitcoin network’s hashrate has recently hit a new all-time high of 74.5 million terahashes per second, after growing 109% year-over-year. The cryptocurrency’s previous all-time high hashrate was in late June of this year, at 68.6 million TH/s.

Bitcoin's hashrate hit an all-time high

The cryptocurrency’s hashrate has likely been increasing as miners are betting on its future, with renewed confidence coming from this year’s rally, which saw BTC go from around $3,700 in early January to, at press time, around $11,250.

Miners are also likely betting on BTC as its halving event is expected to occur in May of next year. In the event, the number of generated bitcoin rewards per mined block will be halved, meaning it’ll go from 12.5 BTC per block to 6.25 BTC per block.

Historically, the price of the flagship cryptocurrency’s price has risen with halving events, just like that of other cryptocurrencies. Last month litecoin, a cryptocurrency seen as the silver to bitcoin’s gold, hit a 13-month high as its halving event is set to occur in August of this year.

It’s also worth pointing out that Bitcoin’s hashrate hit a new all-time high at a time in which decentralization is seemingly prevailing. According to Blockchain.com data, no mining pool currently controls over 20% of BTC’s hashrate.

No pool has over 20% of bitocin's hashrate

In comparison, back in 2014 one single entity controlled over 51% of bitcoin’s hashrate, while last year Bitmain, through the BTC.com and Antpool mining pool, came close to 51% as well. Currently, both of these pools control little over 30% of the Bitcoin network’s hashrate.

It’s important no single entity manages to control 51% of a cryptocurrency’s hashrate, as with it they’re able to attack its blockchain and pull, for example, a double-spend attack. As covered, in January of this year Ethereum Classic (ETC) suffered such an attack, with crypto exchange Gate.io having to cover over $200,000 in losses for its users.

Mining pool who’ve in the past managed to control the majority of BTC’s hashrate have argued they’re economically incentivized not to attack the cryptocurrency, as they’d destroy trust in it, which would likely lead to bitcoin’s price crashing. In the cryptocurrency space, however, users tend to prefer not to have to trust a single entity.

Notably, the hashrate’s rise has been accompanied by growing usage of the Bitcoin network, which recently came close to a new all-time high. As covered, bitcoin transaction inputs and outputs have been growing steadily since last year’s bear market.