Pantera Capital compares current bitcoin rally with 2017

Huge profit potential: Pantera Capital compares current bitcoin rally with 2017

  • Pantera has predicted the January 2021 bitcoin price in April 2020.
  • The firm quotes Mark Twain: „History does not repeat itself, but it often rhymes.“
  • Pantera sees Bitcoin peaking at around $115,000 in August 2021.
  • The „Pantera Blockchain“ letter for January 2021 also looks at its Bitcoin post-halving predictions and the value of Ethereum.

In the latest newsletter, Pantera Capital gives itself a bit of a pat on the back for accurately predicting the price of bitcoin in January 2021 in April 2020. It also looks of Corona Millionaire at the fundamental differences between the 2017 bubble and the current situation.

Pantera Capital began its January newsletter by looking at Bitcoin’s price movements since the May 2020 halving. After explaining the theoretical impact of the halving on Bitcoin’s supply and price, the firm presents the correlations to its predictions.

Simply put, they more or less came true

The market lagged Pantera’s predicted price by up to 15 weeks in the summer of 2020. However, by the end of December, the market price of bitcoin (Go to buy bitcoin cheap guide) was in line with the prediction. Moreover, by mid-January, the projection was behind by one week.

The next date, February 15, 2021, has a projected price of $45,268. The chart shows prices through August 1, 2021, with a peak price of $115,212 at that time.

This time it IS different – and also not

After pointing out the similarities of Bitcoin cycles based on supply and pricing, Pantera looked at the differences between the current boom and the 2017 bubble. In particular, the authors point to the dominance of the „now proven“ Bitcoin and Ethereum in this run. Together, the two now account for 86% of market volume, up from about 50% in 2017.

Moreover, the market understands the environment better this time. In the previous run, the other half of the market volume was „mostly non-functioning tokens“. Recalling the hype around ICO projects at the time, a scathing assessment follows. „Obviously it’s impossible to come up with 50 brilliant ideas every week.“

Is Ethereum undervalued?

The third big issue for co-CIOs is the value of Ethereum. Joey Krug notes that some Bitcoin-related data points to an imminent turnaround for Ethereum.

For example, Bitcoin dominance is at the upper end of its range, which could lead to a rotation to Ethereum. However, he cautions against comparing BTC and ETH too much, „as digital gold and DeFi are two different things.“

At the same time, Krug notes that Ethereum is low on P/E multiples. Therefore, the case for Ethereum is high.

How high? Based on transaction fees, the current implied P/E multiple is 79. However, „the underlying usage is growing 25x (total value in DeFi) – 100x (DEXs) year over year.“