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Pantera Capital Explains Why Bitcoin Could Rise Soon

Despite the recent turmoil in the cryptocurrency market, Pantera Capital predicted a rise in the price of bitcoin in the following weeks. According to the investment firm, ‘Tax Day’ could be one of the drivers. In addition, the cryptocurrency industry may soon separate itself from traditional financial markets and start trading independently, the company added.

light in the tunnel

Bitcoin’s last few months have been quite bearish. While many proponents had expected to see it trading at $100,000 by the end of 2021, it ended the year below $50,000, and the start of the new year meant more declines.

February 24 was another negative trading day as the military conflict between Russia and Ukraine led to significant declines in asset prices. Today, however, BTC has recovered most of the losses and is near $39,000.

In your report, dubbed “The Next Mega-Trade,” Pantera Capital outlined its reasons why bitcoin could soon resume its bull run. One of them is the approach of “Tax Day”, which this year is on April 18.

The company recalled that in 2013, 2017, 2020 and 2021 (previous major runs), the price of bitcoin had spiked significantly 35 days before the event. However, each time the asset lost some ground that day, investors were selling some holdings to cover taxes.

“Does that make any sense. Many cryptocurrency traders are new to investing. You can imagine a person buying as much bitcoin as he can. Since they are all-in on cryptocurrencies, the only way to raise money to pay their taxes is to sell some cryptocurrencies. Prices drop until Tax Day.”

Crypto could gain independence from financial markets

Pantera Capital also addressed the Fed’s policies during the COVID-19 pandemic. The company called the mass printing of fiat currencies, the manipulation of Treasury bonds and the mortgage of bonds a “clearly wrong” mix.

In addition, he blamed the US central bank for rising inflation and economic turmoil within US borders. Pantera Capital said there is a bubble that will burst, after which the Fed will have to raise interest rates even further. According to CEO Dan Morehead, this sounds like good news for the digital asset universe:

“I have a very strong conviction that the markets are really getting it wrong and that rising interest rates (which I think is pretty obvious would happen and will continue to happen) is not so bad for cryptocurrencies. And relative to the other asset classes, it’s really great for blockchain pricing.”

Subsequently, Pantera Capital believes that the cryptocurrency sector will emerge as a financial niche on its own, meaning that fluctuations in traditional currency markets will no longer be a concern:

“And so we think in the next few weeks, cryptocurrency will basically decouple from traditional markets and start trading on its own again.”

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About the author


I am CBC, I am a Crypto expert and a part-time blogger. I usually write about how and where to buy crypto coins in legit ways.

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