"BEST PLACE" to Store Capital is in Digital Assets, Says Pantera CEO
Pantera began gathering leaders together in 2014 to encourage the growth of the blockchain system. Pantera aims to focus on the important and exciting areas in the blockchain industry.
Investors in the stock and cryptocurrency markets are particularly focused on the Federal Reserve’s potential response to increasing inflation. According to the present logistics, it has hiked up to 7.5 percent this month.
Bitcoin and cryptocurrency markets have frequently moved in tandem with stock market patterns; however, Dan Morehead stated in his February 16 newsletter that the Federal Reserves’ “major policy U-turn” brunt will be borne by bonds, stocks, and real estate with respect to raising interest rates.
Despite the fact that the crypto market has been in decline since late 2021, the CEO believes that digital assets will be the "best place" to store capital throughout the aftermath of the U.S. Federal Reserves’ actions.
“I think our markets will decouple soon. Investors are going to think: bonds are going to get crushed as the Fed goes from the only buyer on Earth to seller. Rising rates will make equities and real estate less attractive.”
Morehead raises a critical question about where would one invest when both stocks and bonds are falling low? He adds that Blockchain is the 'legit place to invest in that world.'
To support his claim, Morehead cited a prior comment he made during a conference call with investors earlier this month, in which he stated that asset classes such as gold and cryptocurrency do not immediately equate to interest rates in the same way that bonds do.
“Blockchain isn’t a cashflow-oriented thing. It’s like gold. It can behave in a very different way from interest-rate-oriented products. I think investors will be given a choice: they have to invest in something, and if rates are rising, blockchain is going to be the most relatively attractive,” he said.
Morehead agreed that, while the crypto market appears to have responded to the Fed's recent moves, the value proposition of digital assets has remained unchanged, and that the lowering prices might also be attributed to the end of the fiscal year in the United States (US financial tax year).
The CEO of Pantera feels that the unplanned tax positions have contributed to the crypto selling pressure. Consider a trader that actively purchases and sells BTC, ETH, etc, and other cryptocurrencies. It is preferred in such a scenario to keep the money made in the markets only.
Last year the cryptocurrency capital gains were a total of $1.4 trillion.
“That might have contributed to a significant portion of the recent sales," he noted.
However, according to the prediction of Morehead crypto market will surge again post the many ups and downs it experienced.