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Pantera Capital: Despite $ 66,000, Bitcoin is undervalued

Pantera Capital report notes that recent periods of falling BTC prices have been less severe than in the past

Pantera Capital considers Bitcoin to be undervalued, despite the historical highs recorded on Wednesday, October 20th.

The Bitcoin (BTC) market trend to collapse over 80% after strong bull runs can be terminated.

This emerges from a new report published by the hedge fund based in California Pantera Capital.

In particular, the report notes that the recent periods of falling BTC prices have been less severe than in the past.

For example, in 2013-2015 and 2017-2018 Bitcoin collapsed by up to 83% after exceeding $ 1,111 and $ 20,089, respectively.

Similarly, the bull market in 2019-2020 and 2020-2021 led to massive price corrections. However, their reversal scales were then -61% and -54%, respectively.

Dan Morehead, CEO of Pantera Capital, underlined the steady decline in sales after 2013-2015 and 2017-2018, noting that future stock markets will be "shallower".

As he explains, "I have long argued that as the market expands, becomes more valuable and more institutionalized, the range of price fluctuations will be mitigated."

Is BTC undervalued?

It is becoming more and more common to hear about upcoming $ 100,000 valuations as Bitcoin grows and becomes a key financial asset, with its first approval by the ETF now a reality.

Morehead cited the popular stock-to-flow model, which studies the impact of Bitcoin halving events on prices.

As it notes, the first halving reduced the new Bitcoin issuance rate by 15% of the total outstanding bid (approximately 10.5 million BTC), leading to a BTC price rally of 9,212%.

Similarly, the second halving reduced the supply of new Bitcoin by one third (75 15.75 million BTC).

It led to an upward trend of 2.910%, ie one third of the previous bull run.

The last halving was on May 11, 2020, which further reduced the amount of new BTCs, with Bitcoin having risen more than 720% since then.

In this context, "Logarithmic circles make the current level seem cheap to me," says Morehead.

Source: https://www.bankingnews.gr/

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