The cryptocurrency industry has grown over the years and now it is openly attracting the attention of trillion-dollar asset management companies. Institutional volume is increasing and investors are starting to return to the markets. Optimism about the Fed’s easing and the expectation of ETF approval are set to take crypto to higher levels. So what are the experts saying?
Expert Investor Market Forecast
Dan Morehead, the founder of Pantera Capital, currently manages over $4.2 billion in assets. He is among the expert traders closely followed by the crypto community. In his recent comments on social media, Morehead made predictions that will please cryptocurrency investors.
The expert trader said that the S&P 500 has become “overvalued” and is approaching a new wave of decline. The investor, who manages billion-dollar assets, says that the Federal Reserve will likely have to continue raising interest rates in the face of increasing wage inflation and a wave of worker strikes across the United States. This is a prediction that contradicts the current market expectation, but Morehead may be looking at the current situation from a broader perspective.
“Another possible outcome is that prices will remain sideways for a very long time. There have been two approximately 13-year periods when stocks did not go up:
August 2000 – February 2013
November 1968 – August 1982
This is something like my ‘best-case scenario’.”
To complete the scenarios, I can definitely see the possibility of stocks returning to the average stock risk premium that we have experienced in such environments. During these two periods, bond yields were on average 2.25% higher. Stocks would therefore drop by 43% if they were to be repriced accordingly. My central prediction is shown below in gold.”
Will Cryptocurrencies Fall?
The scenario proposed by Morehead would normally cause a major drop in cryptocurrencies. Indeed, the rise of cryptocurrencies is currently supported by macro support as the market is pricing in a 100 basis point cut for next year. However, the expert investor is saying the opposite. While stock markets may experience major sell-offs, cryptocurrencies will diverge positively in the process.
“So what does this mean for cryptocurrencies?
We are constantly talking to asset managers. If you are thinking of investing your money in bonds, I think this is quite dangerous. Real estate is coming from all-time highs. Stocks are overvalued. Only a few options remain, such as real commodities and crypto assets.
Blockchain is a trillion-dollar asset class. Most institutions are not currently investing in these assets. I think they should allocate a portion to this.”
With the approval of US-based spot ETFs, adding Bitcoin to companies’ balance sheets will become extremely easy and secure. Perhaps the scenario we will experience is what Morehead mentioned?
