Bitcoin’s Seventh Bull Cycle: A New Era
According to Pantera Capital, things are looking bright for Bitcoin (BTC) as it gears up for potentially its seventh bull cycle. CEO Dan Morehead has provided a compelling argument on what 2023 might hold for the crypto world, stating, “this year is all about rebuilding trust” following the chaos of the FTX collapse.
Bitcoin’s Past, Present, and Future
After gaining a whopping 40% in January, the recent retracement in Bitcoin’s price seems to worry some investors into thinking fresh lows are on the horizon. However, Morehead believes we’ve already hit those lows. He asserts, “Pantera has been through ten years of Bitcoin cycles, and I’ve traded through 35 years of similar cycles. I believe that blockchain assets have seen the lows and that we’re in the next bull market cycle,” and he’s waving goodbye to the correlation debate with traditional risk assets.
Reflecting on Market Drawdowns
Morehead digs into the data, revealing the dramatic impact the last bear market had on crypto’s landscape. He outlines that the drop following Bitcoin’s all-time highs was indeed substantial, claiming it was the median decline when looking at Bitcoin’s history. Yet, he confidently notes, “I think we’re done with that and beginning to grind higher.” It’s like watching a comeback kid movie where the protagonist stumbles, only to rise victoriously in the end!
Rebuilding Trust in Decentralized and Centralized Finance
Pantora Capital also expressed hope for decentralized finance (DeFi), but they are focusing on a crucial step first: rebuilding trust within centralized finance (CeFi). With the collapse of major players in 2022 like Three Arrows Capital and FTX, the firm suggests lessons have been learned. Morehead highlights, “2022 was a year of booms and major busts… but the failures were caused by bad actors in jurisdictions without clear regulations.” He predicts that 2023 will prioritize regulation, nurturing trust by playing by the rules.
Looking Ahead: Hoping for a Regulatory Renaissance
As we step into 2023, Morehead implies a shift in the landscape of crypto regulations, advocating for a recovery on a jurisdiction-by-jurisdiction basis. While he refrains from diving into the details of the ongoing tug-of-war with regulatory bodies like the U.S. Securities and Exchange Commission, the sentiment is that a more robust and trustworthy framework could be on the horizon. Ultimately, this might lead to CeFi regaining its authority in the crypto space—like a phoenix rising from the ashes!
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