Everyone is talking about the crypto winter lately. We’re in a bear market and the prices are dropping, but despite that, there are still strong potential for the future of blockchain, crypto, and bitcoin.
Dan Morehead, the CEO of bitcoin investment firm Pantera Capital, says everyone needs to chill out about the current Crypto Winter. Morehead wants to remind everyone that the crypto industry had weathered similar bear markets before, and this one actually bodes well for the future of bitcoin and blockchain. In other words, he feels that the crypto winter is a good sign that things are becoming stable.
Dan mentioned in a recent podcast interview that this is “the 2nd crypto winter” that we’ve been through.
“There was one in 2014 to 2015. In the previous one, I had more of a worry in the pit of my stomach about whether blockchain was actually going to work. There were real regulatory risks.”
“With this one, the underlying fundamentals are much, much stronger than they were in the 2014-2015 Crypto Winter.”
Morehead says Pantera Capital makes investment decisions based on a five-to-10-year outlook, so its strategies are not affected by “distracting” daily bitcoin price fluctuations.
“We are always trying to think [ahead] five to 10 years in our investing and looking at the positions that would do well over a long period of time,” Morehead explained. “We’re not trying to get wrapped up in the cycles of the price action.”
Morehead believes that institutional investments will eventually come. However, he conceded that the current price slump is deterring them from pulling the trigger. Morehead says it will take big-name, institutional-grade custodians to lure institutional money into the market. However, he noted that this is already happening, with ICE’s Bakkt and Fidelity making big moves into the space.
Because institutional investors are risk-averse in their investment approach, Morehead says they won’t start betting on bitcoin until its price rises. He pointed out that this goes against the oft-cited strategy to “buy low and sell high.”
When asked how regulatory uncertainty affects the industry, Dan Morehead noted that the IRS and the CFTC have already issued statements. The major holdout right now is the Securities and Exchange Commission.
We’ve been seeing a lot of financial analysts that comes up with random predictions, but Morehead isn’t one of those. Pantera Capital have been pouring money into blockchain related companies despite the crypto winter, so he holds his ground quite well.