According to the fund’s partner, this is a time for entrepreneurs to raise capital and for investors to invest in shares at favorable valuations

Pantera Capital explained the benefits of a bear crypto market

20.05.2022 - 11:00


2 min

What’s new? Paul Veradittakit, a partner at Pantera Capital, a cryptocurrency hedge fund, believes cryptocurrencies are at the beginning of a bear market. He noted that entrepreneurs now need to save and raise capital. Veradittakit added that it is a “great time” to invest due to the favorable value of the shares. He reported this on his blog.

Veradittakit’s blog

What else did Veradittakit write? According to the expert, now it may seem like the stock market is linked to the cryptocurrency market. However, he recalled that during the last bear market, it took 71 days to break their correlation, after which digital asset rates started rising. Veradittakit also wrote that usually during a bull market, most transactions are linked to digital assets, while during a bear market there is a demand for equities. He attributed this to a decline in investor interest in risky assets.

What is known about Pantera Capital? It is an American cryptocurrency hedge fund founded by Dan Morehead in 2003. In 2013, Pantera Capital launched the first bitcoin-focused investment fund in the United States. As of January 2022, Pantera Capital had assets worth $5,6 billion under management.

What events happened before? Pantera Capital cashed out almost 80% of its investments in the Terra (LUNA) blockchain’s native token before the collapse of the TerraUSD (UST) stablecoin rate. According to The Block, the fund invested in Terraform Labs at least twice: it participated in a $25 million funding round in January 2021 and then joined another for $150 million in July 2021.

Pantera Capital co-Chief Investment Officer Joey Krug explained that the fund did not invest in LUNA as part of these rounds, the token was acquired on the public market through trading vehicles rather than venture capital investments.

Analysts’ opinions and predictions. In April, analyst and crypto trader Jason Pizzino suggested that the price of bitcoin could reach $1 million. The crypto asset would need to break its correlation with the stock market to do so. According to Pizzino, bitcoin is highly dependent on the Nasdaq stock index.

In May, crypto analyst Kevin Svenson reported that bitcoin began to show signs signaling the end of a bear market. However, the analyst clarified that bitcoin is highly correlated with the stock market in 2022. According to him, if the S&P 500 index starts to decline, the first cryptocurrency’s rate may fall as low as $22,000.

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