- Despite the most recent period of negative year-over-year returns for Bitcoin (BTC), Pantera Capital believes this trend will not persist.
- There has been positive news in the industry including a positive court ruling, a fourth-halving coming up and endorsements by asset managers like Black Rock.
- Pantera Capital believes that Bitcoin will likely rise to $150,000 after its subsequent four-year halving cycle.
Although the most recent period of negative year-over-year returns for Bitcoin (BTC) was the longest ever, says Pantera Capital founder Dan Morehead, this pattern is unlikely to persist. According to Morehead, there is a time limit on how long markets may decline and that triggers for growth are approaching.
By June 12, the price of bitcoin has fallen for 15 straight months on a year-over-year basis, breaking the previous mark of less than a year. Despite this, and despite a recent decline, bitcoin is still up more than 20% year over year.
Bitcoin will likely close to $150,000 by next year
According to Pantera Capital, Bitcoin will likely reach close to $150,000 over its subsequent four-year halving cycle. Furthermore, Morehead disputes the idea that the impending BTC block reward for mining halving, which will take place in April 2024, has already been included into the price. According to him, the price will rise if the demand for bitcoin stays the same while the supply is decreased. According to Morehead’s projections, bitcoin might hit around $35,500 by the April 2024 halving and roughly $150,000 by late 2025 after bottoming out late last year.
The crypto asset manager’s management reiterated their positive predictions for the price of bitcoin in its most recent “Blockchain Letter,” which was published on August 22.
According to Pantera Capital, the halving cycles have a significant impact on how the price of bitcoin performs. With the next cycle approaching in the next year, the company is wagering that past patterns will hold true.
According to the article, BTC/USD often moves in about equal cycles at the bottom and top of each block subsidy halving, which reduces the amount of Bitcoin given to miners every block by 50%.
“Bitcoin has historically bottomed 477 days prior to the halving, climbed leading into it, and then exploded to the upside afterward,” it stated.
The same hypothesis contends that the current BTC price cycle bottomed out near the end of the bear market in 2022.
Pantera said, “IF history were to repeat itself, the price of bitcoin should have peaked on December 30, 2022.
Looking ahead, BTC/USD may be trading at about $35,000 by the halving deadline in April 2024, which it is still on course to achieve.
However, what occurs in the following 480 days includes considerably more than just a new record high.
“Only a third as many fresh bitcoins were available after the 2016 halving. It’s interesting that it only affected prices by exactly one-third. In comparison to the last halving, the quantity of new bitcoins was lowered by 43% in 2020. It had a 23% larger influence on pricing, according to Pantera.
Good news continues to rise in the crypto sector
Morehead highlights several potential positive catalysts for the market. First, he mentions the positive court ruling on the XRP token for Ripple Labs in July, which still stands. Additionally, “endorsements” from asset managers such as BlackRock and Fidelity through their spot bitcoin ETF applications bode well for the future.