Bitcoin is beginning its “seventh bull cycle,” and investors should not be scared of crypto post-FTX, Pantera Capital believes.
In its latest “Blockchain Letter” on Feb. 8, the asset management firm’s CEO, Dan Morehead, predicted that 2023 would be a “year for rebuilding trust.”
Morehead: Crypto assets have “seen the lows” this cycle
With BTC price action retracing slightly after gaining 40% in January, some market participants still insist that new macro lows are due across crypto assets.
While the timing for such a scenario varies, consensus remains absent when it comes to how the market will rebound.
For Morehead, however, the time to flip bullish on crypto is already here.
“Pantera has been through ten years of Bitcoin cycles and I’ve traded through 35 years of similar cycles,” he noted.
“I believe that blockchain assets have seen the lows and that we’re in the next bull market cycle – regardless of what happens in the interest-rate-sensitive asset classes.”
That perspective differs from the majority in casting aside the debate over crypto price correlation with risk assets such as equities. As Cointelegraph continues to report, this forms the backbone of some other prognoses for 2023.
Morehead argued that the drawdown from Bitcoin’s latest all-time highs had placed the market well within the historical context, despite dipping below its previous bull market all-time high after the FTX debacle in November 2022.
“The decline from November 2021 to November 2022 was the median of the typical cycle. This is the only bear market to more than completely wipe out the previous bull market. In this case, giving back 136% of the previous rally,” he wrote, alongside accompanying data.
“The median downdraft has been 307 days and the previous bear market was 376. The median drawdown has been a -73% downdraft and the latest bear market ended at -77%.”