The CEO of Pantera Remains Optimistic Regarding Crypto

Dan Morehead has made it abundantly obvious that the prolonged crypto winter does not phase him in the least.

In an interview that aired on CNBC's Squawk Box on Wednesday, the founder and CEO of Pantera highlighted the present condition of the digital assets field. He expressed his optimism over the future of blockchain technology, despite the market's significant decline from its all-time highs.

Morehead stated that he believes cryptocurrency is in "a secular bull market," but that it has been trapped in a slump with other risk assets over the past few months. He forecasted that the nascent asset class could lose its close correlation with other markets in the future. In response to the unfavorable macro conditions that have plagued equities and cryptocurrencies throughout the course of this year, he stated, "I can easily envisage a world a few years from now where risk assets themselves might still be struggling but blockchain's back to all-time highs."

Morehead made an audacious forecast regarding the manner in which the asset class may gain usage over the course of the next few years. He suggested that the value of cryptocurrencies would improve if their acceptance increased. "I think in four or five years it's gunna be literally billions of people using blockchain," he stated. "There are hundreds of millions of people using blockchain right now."

According to data provided by Crypto.com, the cryptocurrency market as a whole was getting close to 300 million users at the beginning of the year. Bitcoin, which began as a relatively obscure Cypherpunk movement in 2009, has amassed approximately 200 million users across the globe since its inception. On the other hand, this sector has been experiencing a bear market for the past few months, which casts doubt on the likelihood of experiencing rapid growth in the near future.

The Falling Retail Interest

Hordes of new users have a tendency to join the cryptocurrency market whenever it sees a bull rally similar to the one that caused the market to surpass $3 trillion in 2021. However, many of them exit the space when they face price volatility in the downward direction as the market cycle comes to an end, which slows down adoption. The price of bitcoin has fallen by more than 70 percent since its all-time high in November 2021, and public interest in the technology has plunged as a result of deteriorating macroeconomic conditions and negative market sentiment.

According to Google statistics, global searches for the terms "crypto" and "Bitcoin" have reached their lowest levels since before the year 2021 in the most recent weeks. Google search trends are a prominent statistic for gauging the interest of the mainstream public in cryptocurrencies. During retail-driven craze moments in December 2017 and May 2021, the number of searches for "bitcoin" reached a peak.

In response to the current crypto winter, Morehead stated that, in his opinion, "we're pretty well through the worst of it." He made a reference to the liquidity crisis that struck the industry in June, which caused a number of centralized cryptocurrency lenders, such as Celsius and Voyager Digital, to declare bankruptcy. "When you see a market fall down 75, 80%, [if] you add any leverage, it's gunna be tough," he stated, arguing that June 2022 constituted a bottom for the current market cycle. He was referring to the market's decline of between 70 and 80 percent.

Morehead also mentioned that the market capitalization domination of Bitcoin and Ethereum touched a low of 57% on Tuesday. He added that he believes there are "hundreds of extremely fascinating projects" that might see development in the future.

It is important to note that although Morehead has an optimistic perspective, the Pantera investment firm that he works with is notorious for holding positions for extended periods of time. In the short term, there are plenty of reasons to take a more pessimistic view on Bitcoin and the broader space, including market exhaustion, soaring inflation, and the expectation of further interest rate hikes from the Federal Reserve. In addition, there is a lack of potential catalysts following Ethereum's "sell the news" Merge event, which is another reason.

According to data provided by CoinGecko, the total market capitalisation of cryptocurrencies around the globe is currently somewhere around $950 billion. That's nearly 70 percent lower than its all-time high.