Hedge Fund Chief Remains Bullish on Crypto Investments Despite Bitcoin Price Slump
Originally published on: Hedge Fund Chief Remains Bullish on Crypto Investments Despite Bitcoin Price Slump
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March 22, 2018
When making comparisons to bubbles, experts often compare the crypto boom to the “dot com” craze that somehow shaped the evolution of commerce on the internet. Now, the CEO of one cryptocurrency hedge fund that has emerged in the midst of the crypto boom has said that even if bitcoin goes down, his investors will still make a healthy profit.
Bitcoin Price Slump and the Pets.com Analogy
Dan Morehead, the CEO of Pantera Capital, is no stranger to bullish remarks concerning bitcoin and the crypto market. In a recent interview, he remarked that the crypto market was on track to produce far higher returns than mainstream financial markets.
Morehead made these comments in the immediate aftermath of the significant cryptocurrency market correction that saw the total crypto market cap decline by almost 50 percent at the start of 2018.
Even with the persistent price slump that has prevailed since then, Morehead is still optimistic that investors will turn healthy profits. In eliciting his point, the investor turned the dot-com bubble argument on its head.
In a letter to investors on March 16, 2018, the Pantera CEO described a positive scenario in which investors had both Pets.com and Amazon.com in their IPO portfolios.
Naturally, and despite the majority of internet stocks crashing at the turn of the millennium, said investors still enjoyed massive gains.
Concluding his letter, he assured his investors that even if bitcoin were to go the Pets.com route, they would still make healthy profits.
The State of the Pantera Hedge Fund
February was not a particularly pleasant month for cryptocurrency hedge funds as they found themselves in dismal bear territory. Crypto hedge funds across the board were down by about 0.08 percent and the last time institutions performed so poorly was in October 2016.
For Pantera in particular, the hedge fund declined by about 25 percent in the first two months of 2018 alone.
Regarding its constituent funds, the Pantera Bitcoin Fund has dropped by 26.9 percent while its Long-Term ICO fund has appreciated by almost six percent. The Digital Asset Fund has depreciated by more than 16 percent.
It isn’t all doom and gloom for the firm, however. Since its inception, the firm has risen by more than 200 percent. As a result, Morehead continues to believe that his investors will make good returns on their investments in the cryptocurrency market.
The Miracle Whip of Finance
In his letter to investors, the Pantera CEO spoke about the importance of a diversified crypto investment portfolio. He took inspiration from Jeff Bezos, the CEO of Amazon and his investment strategy during the dot-com era.
He advised investors to have some percentage of their crypto portfolio invested in blockchain projects and even called bitcoin “the miracle whip of finance.”