Pantera's Dan Morehead Blames Fed's Mistakes for Crypto Meltdowns
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According to Dan Morehead, the Fed has purchased government and mortgage bonds equaling more than 200 percent of all mortgage lending in the United States over the previous two years, causing the markets to be $15 trillion overpriced compared to the 50-year real rate.
Cascading Collapse of Major Projects
Morehead said, "I'm very concerned that the Fed doesn't seem to have any sense of what is causing inflation — their manipulation of the mortgage market,"
Dan Morehead believes that once the Fed begins to unwind, it will drain excess liquidity from the market, causing asset values to correct. The cascading failure of significant cryptocurrency initiatives revealed the huge amount of excess leverage in the market. He thinks that in the ensuing months, this might cause a few more "big meltdowns" in the cryptocurrency market. He continued that despite being long-term bullish on several of these projects, Pantera increased its Bitcoin allocation during the market downturn to lower downside risk.
This year, cryptocurrencies declined due to the Fed raising rates to combat rising costs. In this context, cryptocurrencies have demonstrated remarkable connections with stocks, frequently moving in unison during trade, following Bitcoin's pattern.