Dan Morehead, the founder and Managing Partner of Pantera Capital is optimistic about the price action of the broader digital currency ecosystem moving forward. Taking to his official twitter account, Dan recalled the events that led to the crypto winter that was sparked by the collapse of Terra (LUNA) and how a turnaround is imminent.
Recalling the Origin of the Crypto Winter
Just around this time last year, the industry’s first algorithmic stablecoin TerraUSD (UST) depegged following what was tagged an attack by unidentified actors at the time. The deep correlation between UST and Terra (LUNA) caused the digital currency to lose 99.9% of its value.
This event impacted many crypto venture capital firms and hedge funds who have deep exposure to the two tokens as well as the parent company Terraform Labs. One of the first firms to be impacted includes Three Arrows Capital (3AC), Celsius Network and Voyager Digital.
The Fear, Uncertainty and Doubt (FUD) that was present in the market following the bankruptcies of these firms became overwhelming for investors who largely went on hibernation from investing in crypto. The impact of these conservative investment strategies saw digital currencies losing their value from their previous multi-year highs.
The aftermath of the Terraform Labs collapse was further compounded by the implosion of FTX Derivatives Exchange. While many digital currencies are yet to recover from the impact of these market uncertainties, Dan Morehead believes the worst is now over.
“Bitcoin’s year-over-year return bottomed at -76% amidst the FTX debacle last November. It recently flipped positive and is now at 31%. We believe it’s been enough time that we can rally now,” he said in the tweet he shared.
It’s been over a year since Terra/LUNA, Three Arrows Capital, et al.
Bitcoin’s year-over-year return bottomed at -76% amidst the FTX debacle last November.
It recently flipped positive and is now at 31%.
We believe it’s been enough time, that we can rally now. pic.twitter.com/9OYgStmz00
— Dan Morehead (@dan_pantera) June 20, 2023
Positive Sentiments are Emerging
There is a backing to Dan’s predictions as the world’s largest investment manager, BlackRock has filed an application with the United States Securities and Exchange Commission (SEC) to launch a spot Bitcoin Exchange Traded Fund (ETF) product.
While no such product has been approved by the market regulator to date, the industry is optimistic that with BlackRock’s stellar success rates in its previous ETF applications, the chances it will get approval is high. Should these projections play out as expected, the Bitcoin market is bound to expand significantly with new flow of funds flowing into the ecosystem.
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