If you have already taken a long position on Bitcoin or any of the other cryptocurrencies, this news must come as music to your ears: Notwithstanding the current valuation of the digital currencies, one prominent investment advisor believes there is a bright future for these virtual assets.
This is coming from Dan Morehead, the founder and CEO of Pantera Capital, which has funds worth around $1 billion under management; around 10 percent of which is in cryptocurrency portfolios.
In his opinion, the total market capital of all cryptocurrency baskets put together stands around $400 billion currently and can go to $4 trillion and even $40 trillion, though it may happen over a decade or so and not immediately.
Had Got it Right on Bitcoin Price in the Past
To the credit of Morehead (and that of Pantera), some of his previous predictions have indeed come true. The earlier estimate that going into the New Year, Bitcoin may drop considerably, by as much as 50 percent, happened almost to perfection.
Even after that, many investors who took Pantera’s advice stood to gain as the prices grew from $7,500 to $8,000 to close to $10,000.
According to Morehead, the currency is definitely in a bullish phase right now and could only keep pushing upward.
Some Far-Fetched Predictions
However, there may not be many takers for Morehead’s suggestion that the cryptocurrency assets could reach a valuation of $40 trillion.
For this to happen, even assuming the mining of the currency happens at a feverish pace, the price of Bitcoin has to touch $1 million a piece. Even the most optimistic investor may not agree with such an unearthly figure. The price will have to jump about 10,000 percent.
But it is interesting to note that Morehead is not the only one with such ambitious predictions. John Pfeffer, partner at U.K.-based finance firm Pfeffer Capital, said last month that Bitcoin could replace gold as the benchmarking asset and would trade at $700,000.
There may be some basic reasons why such unimaginable figures are being floated in the public by these personalities. But those who study the currency markets scientifically and are able to use the available matrix to predict currency movements are of the opinion that it is practically not feasible to make such long-term assessments of the way currencies will move. And 10 years is a long period by any reckoning.
These experts would therefore advice extreme caution to those who wish to put all they have in such instruments.
The debate and discussions on cryptocurrencies may never end. There are those who are ready with doomsday predictions, saying a virtual asset without any backup or recognition from the central banks of major economies, can simply fall flat any moment.
Then there are the Panteras and Pfeffers of this world who are saying that the price of Bitcoin could touch astronomical figures.
Ultimately, investors can only wait for the future to take hold.