The chief executive of Pantera Capital, Dan Morehead, is confident that the big crypto selloff is slowing because he thinks “we’ve seen the most of this panic”.
In the monthly newsletter published on June 14, the venture capitalist stated that the best time to buy is when markets are “well below trend”. A Bitcoin trend deviation chart backed up this claim as it showed that the asset has only been this “cheap” relative to its trend for a fifth of its lifecycle.
For new investors, it’s best to buy when the market is well below trend. Now is one of those times.#Bitcoin has only been this “cheap” relative to its trend 20.3% of the past 11 years.
— Dan Morehead (@dan_pantera) June 16, 2021
He also asserted that the year-on-year returns do not indicate that Bitcoin is overvalued either.
“The year-on-year return never went literally off-the-chart like in past peaks. It’s currently trading at 281% year-on-year — which seems entirely plausible given the money printing that has occurred in that period.”
Morehead went on to explain that a convergence of three news events that had made the markets fall so sharply.
Another clampdown from China was one of the big factors, but as Morehead pointed out this has happened several times before.
“OK, let’s take in the latest China “banning bitcoin” thing out with a wider lens. It feels like we’ve also seen **that** movie before.”
He listed eight separate incidents over as many years when China has banned Bitcoin or cracked down on the industry, followed by a chart depicting huge gains Bitcoin has made afterward. Beijing has also been cracking down on Bitcoin mining operations over concerns of energy consumption as it strives for carbon neutrality.
The second reason cited by the Pantera Capital boss was U.S. Tax Day…