This cycle’s Bitcoin and altcoin lows are behind us, says Pantera CEO Dan Morehead as he “looks forward to years of restoring confidence.”
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It’s the start of the “seventh bull cycle” and investors should not fear the post-FTX crypto market, Pantera Capital believes.
In his latest “Blockchain Letter” dated Feb. 8, asset management firm CEO Dan Morehead said 2023 will be “the year of rebuilding trust.”
Morehead: Crypto gains “we’ve seen a bottom” this cycle
With BTC’s price action retracement just after 40% gained in January, some market participants are still continuing to enter a new macro in the crypto assets repository.
Since the timing of such an event is variable, no consensus has been reached to recover the market.
But Morehead, the time has come to flip the button on crypto.
“Panther has been in Bitcoin for ten years of cycles and I’ve been trading for 35 years of similar cycles,” he notes.
“I think the asset barrier has seen a low and we’re in the next bull market cycle — that’s what’s happening in interest-sensitive asset classes.
That perspective differs from most in that he dismissed the debate about the correlations of crypto prices with the risk of assets such as equities. As Cointelegraph continues to report, this forms the backbone of several other predictions for 2023.
Morehead argued that derating from Bitcoin’s latest all time high had placed the market firm in the historical context, although he detrited below its previous bull market all-time high after the FTX debacle in November 2022.
“The decline from November 2021 to November 2022 was the median of a typical cycle. This is one bear market that completely destroyed more than the previous bull market. In this case, the return of the previous rally was 136%,” he wrote, accompanying the data from the region.
“The average downdraft was 307 days and the previous bear market was 376. The median downdraft was -73% downdraft and the last bear market ended at -77%.”
Going forward, the trend will change, with Bitcoin heading to recent record highs.
“I think it’s done and it’s starting to rub off,” Morehead added.
A “jurisdiction-by-law” recovery
Similar optimism has been directed at the decentralized finance space, with Pantera focusing primarily on “rebuilding faith” in centralized finance (CeFi) over the year.
Related: Bitcoin prices roar to 3-week top as SEC fears liquidating $250M crypto long
This would work, Morehead asserted, in light of last year’s huge physical crash that precipitated a crypto bear market.
2012 was a year of bombast and big pictures, especially when it comes to CeFi. In the space of a few months, the world saw the fall of the Capital Three Arrows, the dissolution of Do Kwon’s LUNA, the departure of the Voyager Digital Decoder, and the collapse of Sam Bankman-Fried’s (SBF) FTX empire.
“What is this in common? Some entrepreneurs like say crypto or Web3 failed. But, in fact, bad actors were hidden behind the lines in jurisdictions without certain regulations. If 2022 was the year that broke the rules and failed, I believe that 2023 is the year of institutions in place – when he will enjoy making the rules and benefits.
While the letter did not address the current regulatory battle at the United States Securities and Exchange Commission, it envisions CeFi regaining its jurisdictional “level of jurisdiction” throughout the world.
