Pantera Capital is a well-known investment firm focused on blockchain technology and digital currencies. Founded in 2013, it was one of the first investment firms in the United States to launch funds focused exclusively on cryptocurrencies and blockchain projects. Pantera Capital offers a range of investment services and funds, including venture capital and hedge funds, targeting various aspects of the cryptocurrency and blockchain ecosystem. The firm invests in digital currencies, blockchain startups, and related technologies, aiming to capitalize on the growth and development of the crypto and blockchain sectors.
Dan Morehead is the Founder and Managing Partner of Pantera Capital. Before founding Pantera, Morehead had an extensive career in finance and investment. He has experience working with global macro hedge funds, including Tiger Management, where he served as the head of macro trading and CFO. Morehead’s background also includes roles in corporate finance and investment banking.
On 20 November 2023, Morehead shared his perspective on the potential launch of a spot Bitcoin ETF and its implications for the blockchain and cryptocurrency space. His thoughts were summarized in a post on social media platform X (formerly known as Twitter), with a detailed explanation available in the latest edition of Pantera Capital’s newsletter (“Blockchain Letter”).
Historical Context: Morehead referenced the old Wall Street adage, “Buy the rumor, sell the news,” and its applicability to past regulatory announcements in the crypto space. He cited two key events: the launch of CME futures on 18 December 2017 and Coinbase’s listing on 14 April 2021. Both events marked peaks in Bitcoin’s price, followed by significant declines.
A Different Scenario with Bitcoin ETF: Morehead argued that the launch of a Bitcoin ETF would differ from these past events. Previous developments, such as Bitcoin futures and Coinbase’s listing, did not substantially increase real-world access to Bitcoin. In contrast, a Bitcoin ETF, especially one managed by a firm like BlackRock, would fundamentally change how investors can access Bitcoin.
Positive Impact of a Bitcoin ETF: Morehead expressed a strong belief in the positive impact of a Bitcoin ETF. He anticipates that it will open up Bitcoin to a broader range of investors and significantly increase net buying activity.
Timeline and Approval of Bitcoin ETFs: He predicted that multiple spot Bitcoin ETFs would be approved soon, within a matter of months, not years. This development, according to Morehead, is crucial for Bitcoin’s recognition as a legitimate asset class.
Bitcoin ETF as a Milestone in Asset Classification: Drawing parallels with the evolution of commodities and emerging markets as recognized asset classes, Morehead sees the existence of a Bitcoin ETF as a pivotal step in blockchain’s journey to becoming a mainstream asset class. He suggests that once an ETF exists, not having exposure to Bitcoin would be akin to being effectively short.
Conclusion: Morehead’s stance is summarized in his phrase, “Buy the rumor, buy the news,” indicating his belief in the sustained positive impact of a Bitcoin ETF on Bitcoin’s value and accessibility.
Jim Bianco, a renowned macro strategist and President of Bianco Research, L.L.C., recently offered insights comparing the potential launch of a Bitcoin ETF to Facebook’s 2012 IPO. Bianco, with a career spanning over three decades, is recognized for his independent and critical analysis of various financial topics, including monetary policy and market dynamics.
Bianco’s expertise, honed through years at Bianco Research and previous roles at UBS Securities, First Boston, and Shearson Lehman Brothers, is frequently featured in major media and financial publications. A Chartered Market Technician and a member of the Market Technicians Association, he holds degrees from Marquette University and Fordham University.
In an interview with Real Vision, Bianco drew parallels between Facebook’s IPO and the potential market response to a spot Bitcoin ETF in the U.S. He recalled Facebook’s initial share price drop from $28 to $11, defying expectations. Bianco suggests Bitcoin might see a similar trend, with an initial rally post-ETF approval followed by a period of stagnation or decline.
Reflecting on Facebook’s IPO, where the shares eventually soared but not before a significant drop, Bianco cautioned that Bitcoin could experience a similar trajectory. He indicated that while long-term gains are expected, there might be a substantial downturn before Bitcoin reaches its anticipated value. Bianco’s comparison highlights the potential volatility and unpredictability in the cryptocurrency market following significant regulatory developments.
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