CRYPTO

The next bitcoin price crash will be ‘less than 80%’, says Pantera Capital CEO


The tendency of more than 80% crashes may end after the strong bull run log of the Bitcoin (BTC) market.

According to a new report released by California-based hedge fund Pantera Capital. In detail, the report noted that recent periods of BTC price declines were less severe than in the past.

In 2013-15 and 2017-18, for example, Bitcoin crashed by 83% after moving closer to $ 1,111 and $ 20,089, respectively. Similarly, the bull of the cryptocurrency runs in 2019-20 and 2020-2021 resulting in a massive price correction. Nevertheless, the scale of their later retracements was -61% and -54%, respectively.

Bitcoin bull and bear market throughout history. Source: Pantera Capital

Dan Morehead, chief executive of Pantera Capital, highlighted the steady decline in sales sentiment after the bearish cycles of 2015-15 and 201-18-1, noting that futures bear markets would be “low”. He explained:

“I have long suggested that as the market expands, becomes more valuable and more institutionalized, the scope of price changes will be moderate.”

The statements came as Bitcoin renewed its bullish strength to re-examine its current record high of around bull 5,000.

The BTC / USD has risen above 60 60,000 for the first time since the beginning of May after the US Securities and Exchange Commission approved the first Bitcoin Exchange-Traded Fund (ETF) a few years after the rejection of similar investment products.

ProShare’s Bitcoin Strategy ETF’s approval raises expectations that it will make it easier for institutional investors to gain exposure to the BTC market. This helped Bitcoin eliminate almost all losses during the April-July beer cycle as BTC doubled its price and recovered above $ 60,000.

The price cycle of Bitcoin throughout history. Source: Pantera Capital

BTC devalued?

Bitcoin is becoming increasingly common to hear $ 100,000 valuations as it has become a mainstream financial asset since its first ETF approval.

Related: $ 200K BTC Price Bitcoin Towards 2nd RSI Peak as ‘Programmed’

Morehead cites the popular stock-to-flow model – which is having an impact on the price of Bitcoin’s “half” event to cancel out a similarly bright outlook for the cryptocurrency. He noted that the first half reduced the new bitcoin issue rate by about 15% (about 10.5 million BTC) of the total outstanding supply, resulting in a 9,212% BTC price rally.

Bitcoin supply decreases after each half. Source: Pantera Capital

Similarly, the second half reduced the supply of new bitcoins by one-third of the total outstanding bitcoin (~ 15.75 million BTC). This leads to a 2,910% bull run, which is about a third of the previous one, thus showing a slightly lesser impact on the price of bitcoin.

Half assembly after bitcoin. Source: Pantera Capital

The last half on record was May 11, 2020, which reduced the amount of new BTC by more than 720% compared to conventional supplies with Bitcoin.

“The flip side is that we probably won’t see 100x-in rallies a year anymore,” Morehead said, adding:

The cycles shown logarithmically make today’s level look cheap to me.

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