Pantera Capital: What has changed at Bitcoin compared to 2014?

Pantera Capital is the first investment company in the United States to focus on blockchain technology. As early as 2014, Pantera announced a partnership with the Fortress Investment Group, which “represents a significant step on the way to introducing bitcoin into the financial sector”.

Bitcoin – Future and Problems

In a recent blog post, Pantera Capital highlighted Bitcoin’s growing popularity over the past five years and the main obstacles to the future. Pantera was founded in 2003 and originally focused on hedge fund investments – but after partnering with the Fortress Investment Group, the company also turned to Bitcoin and other crypto currencies. Dan Morehead, the company’s CEO, believes that first quarter tax sales are largely responsible for the recent downturn in the market:

“I BELIEVE THAT A LARGE PART OF THE DOWNWARD PRESSURE IN THE FIRST QUARTER WAS UNINTENTIONAL TAX SALES – PEOPLE WHO WERE SURPRISED WHEN THEIR ACCOUNTANT TOLD THEM HOW MUCH TAX THEY OWE. AND THEY HAD TO SELL CRYPTO TO PAY THE BILL.”

Bitcoin Code and more investors

In an interview last month with CNBC, Morehead said he believes Bitcoin Code is showing a strong buy-signal. Bitcoin has been growing for six years at a rate of 165 percent per year. Assets that grow at this rate rarely fall below their moving average of 200 days – but when they do, it’s usually a good time to buy.

The CME and CBOE have recently launched Bitcoin futures trading platforms, decisions that Morehead believes will be incredibly beneficial to the crypto market as a whole as they will attract more investors. According to Morehead, Bitcoin’s next step towards mainstream adoption will be a SEC-regulated custodian.

Bitcoin: Then and now
In 2014, Bloomberg spoke with Morehead and Susan Athey of Stanford about the possibility of Bitcoin one day acting in place of the existing monetary system. Four years later, on April 26, 2018, Bloomberg discussed the topic again with the same discussion participants to discuss their predictions.

Question: What has changed in the last four years?

Answer: “In 2014 we had just launched the first crypto currency fund in the USA. We used to have a fund – with one product – that tracked one currency, and now we have four different products that trade 25 ICOs and 25 liquid currencies and 25 equity positions in block-chain-oriented startups. It shows the massive expansion of this asset class.”

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In addition, Morehead highlighted some impressive statistics:

The number of Bitcoin Wallets has increased 10-fold
The hash performance of the Bitcoin network is 100x higher
Bitcoin’s price is 20x higher
One thing that has not changed so dramatically, however, is the transaction volume of the network. Due to problems with Bitcoin’s scalability, the network was unable to support its growing user base – although doubling network usage every six months may not be the worst problem. Morehead also noted the fact that Blockchain is the first half trillion dollar industry that nobody – more precisely financial institutions – owns. Although he mentioned that he believes that will change in the next 12-18 months.