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 is Too Technical For Most Venezuelans to Use, Researcher Finds

Alejandro Machado, the co-founder of the Open Money Initiative (OMI), a project focused on researching how money is “used in closed economies” and “collapsing monetary systems,” has revealed that residents of Venezuela have not completely abandoned the Bolivar.

Although the Bolivar may appear to be practically worthless due to hyperinflation caused by rampant corruption and political and economic instability in Venezuela, Machado pointed out: 

No one wants [the Bolivar,] but people need it to survive.

Access To Products Is Severely Limited

According to Machado, Venezuelans may not be using other currencies or assets such as bitcoin (BTC) because of their highly technical nature. In order to spread awareness about the benefits of cryptocurrencies, particularly in areas affected by high levels of inflation, Machado’s non-profit organization, OMI will work with LocalBitcoins on various initiatives.

According to Machado:

Access to products is the number one thing. Do I have enough to eat this week or do I need to reinvent the ways that I access food?

While bitcoin trading in Venezuela has reached record-level highs recently, the majority of the nation’s residents are reportedly using the pseudonymous cryptocurrency for remittance payments and accepting it as compensation for freelance work.

Can’t Buy Basic Food Items With Bitcoin

Jamaal Montasser, the co-founder at OMI, recently commissioned a study involving 40 participants which focused on investigating how Venezuelan residents use money during times of political and economic uncertainty.

According to CoinDesk, a Venezuelan refugee, residing in Colombia, told the staff at OMI that a member of the national guard in Venezuela threatened to beat him. This, as he reportedly refused to sell coffee at rates determined by the nation’s government and priced in the Bolivar. Meanwhile, a Venezuelan, who is currently working in Colombia, has been smuggling US dollars (earned from work) back into Venezuela by hiding them in her hair and underwear.

Jill Carlson, another OMI co-founder, revealed:

The things that people wanted to buy, they couldn’t buy with bitcoin. You could find merchants willing to accept bitcoin for more high-end goods, but not for more basic or staple goods. You can’t go buy bread with bitcoin in Caracas.

Moreover, processing crypto payments is quite challenging because Venezuelan merchants that do take cryptocurrency usually only have one person who knows how to use a digital asset wallet.

Some of the main organizations supporting the OMI project include the Human Rights Foundation, Zcash Foundation, Cosmos, Tezos, and Stellar.