Pantera Capital CEO Dan Morehead said in a recent statement that when it comes to the possibility of a rate hike expected next month, market participants drown in the details and miss the big picture.
morehead, Bitcoin (BTC) and believes markets are misunderstood and overreacting, as the majority of overall crypto-assets fell in response to the Federal Reserve’s plan to raise interest rates to combat persistent inflation.
“In this case, I have a very strong belief that the markets have completely misunderstood/overreacted and that the rise in interest rates (which I think will and will continue to happen) is really not all that bad for crypto. And compared to other asset classes, this is actually very good for blockchain prices.”
According to the head of the crypto-focused hedge fund, digital assets are unique from other assets in that they are not affected by rising interest rates.
“Of course, when interest rates go up, bond prices go down. I think the bonds [faiz artırımı sonucu] will be murdered. Most other assets, such as stocks, have cash flows that must be discounted, which means lower prices if yields are higher. This also applies to most real estate and most other types of assets.
Blockchain is not a cash flow driven thing, it is not a money making machine. Similar to gold. It can behave very differently from interest rate-driven products. I think investors will have to make a choice when it all comes to fruition. Investors need to invest in something, and if interest rates are rising, blockchain will be the most attractive option.”
Morehead also said that the current correlation between traditional financial markets and cryptocurrencies will not continue for long, referring to a chart of Bitcoin’s (BTC) historical trend over the past 11 years, noting that he predicts the flagship crypto asset will rebound.
“This chart shows where Bitcoin stands in relation to its 11-year log trend, which is representative of our industry. It is currently trading 60% below the trend…
I think the markets will bounce back. I think we’re weeks or months away from meeting very strongly. We are very optimistic about the market and we believe that the prices are at a relatively cheap level as well.”
According to Pantera Capitel, Bitcoin has only been below the trend for 12.7 percent of its history so far.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.