Bitcoin is a dangerous funding that would simply plunge 50 p.c subsequent week to ranges seen solely final month, mentioned a former hedge fund strategist who’s now a digital forex investor.
However Dan Morehead, founder and CEO Pantera Capital, predicted Tuesday that bitcoin in the long term is prone to spike a lot greater than present costs of about $18,200 per unit.
“For the massive blockchains like bitcoin, ethereum and ripple, we’re within the first innings of a multidecade factor,” mentioned Morehead, who purchased bitcoin when it was at simply $72. “And there is going to be some ups and there is going to be some downs, however we’re nonetheless actually early.”
Blockchain, the expertise underlying bitcoin and different digital currencies, is an nameless, decentralized public log that information all transactions.
Bitcoin could possibly be “down 50 p.c subsequent week … the place it was a month in the past,” Morehead mentioned on CNBC’s “Squawk Box.”However in a yr, “it’s going to be a lot greater than it’s at this time.”
Morehead, who started his profession at Goldman Sachs as a mortgage-backed safety dealer, characterised bitcoin and different digital currencies as “digital gold.” He additionally labored as head of macro buying and selling and CFO at Tiger Administration, the hedge fund based by investing legend Julian Robertson.
In 2003, Morehead based Pantera Capital, an institutional funding agency targeted completely on digital currencies and associated corporations. In 2013, Pantera launched its first cryptocurrency fund. The corporate mentioned the fund gained 60 p.c in November and December, and greater than 12,000 p.c in 4 years.
In the meantime, cryptocurrency mining — the method that makes use of complicated pc chips, and electrical energy to make bitcoins — is rising rapidly, Morehead mentioned. “There was a interval the place it was doubling each six weeks. So it is like Moore’s Law on crack,” he mentioned. However he added that the mining enterprise has not too long ago gotten harder and intensely aggressive.
Bitcoin futures launched on the world’s largest futures alternate, CME, on Sunday, every week after the Cboe launched its personal bitcoin futures. Many see the launch of bitcoin futures as a step towards establishing the digital forex as a reputable asset class, while others see bitcoin as a “bubble” and the futures as a method to simply wager in opposition to the cryptocraze.
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