The CEO of one of the largest cryptocurrency investment firms says he believes Bitcoin (BTC) is on the verge of a long-term rally to more than $100,000.
In a new letter to investors, Dan Morehead says he believes that as governments increasingly print money to prop up their economies, the contrast between fiat and cryptocurrencies with fixed supplies will become increasingly apparent.
“This is a really distressing, massively confusing time. I have no idea what’s going to happen in 99% of things right now. However, I strongly believe it’s close to inevitable that this will be very positive for cryptocurrency prices.
My kids used to count to 100, ‘One, two, skip a few, a hundred.’ It feels like we’re doing that on Quantitative Easing. QE1, QE2, skip a few, a hundred. As Quantitative Easing approaches infinity, it simply has to have an impact on things whose quantity can’t be eased.”
As for Bitcoin, Morehead points to the halving, which will reduce the new supply of BTC in about a week, as a key factor that will drive a new bull run.
“Although there are only a couple of data points – and with the caveat that the past doesn’t predict the future – halvings have coincided with increases in price due to a perceived and/or real scarcity of supply.
The second halving decreased supply only one-third as much as the first. Very interestingly, it had exactly one-third the price impact. Extrapolating this relationship to 2020: The reduction in supply is only 40% as great as in 2016. If this relationship holds, that would imply about 40% as much price impulse – bitcoin would peak at $115,212 /BTC.
I realize that price may sound ludicrous to some today. But, $5,000 sounded equally ludicrous as our first written price forecast when we launched Pantera Bitcoin Fund at $65 /BTC.”
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