Bitcoin
Why Pantera Capital Sees Bitcoin Rising to $114,000 by 2025 – DL News
- Pantera Capital outlines its reasoning behind a post-halving prediction for Bitcoin.
- The crypto hedge fund used a market model based on Bitcoin supply to analyze its estimate.
Pantera Capital joined a growing number of finance professionals this year in predicting a heady price for Bitcoin now that the halving is over.
Crypto hedge fund rose by one previous price prediction held a year and a half ago, saying Bitcoin could rise to as high as $114,000 by August 2025.
The forecast reflects the industry’s growing optimism, even amid challenges such as concerns about inflation, the Federal Reserve’s interest rate policy and the escalating crisis in the Middle East.
In your 100th letter For investors, Pantera has restarted its November 2022 analysis of Bitcoin’s past performance before and after its recent halving.
Using what is known as a stock-to-flow model, Pantera evaluated the supply of Bitcoin relative to the flow of new production, which is scheduled to be reduced by 50% every four years in halving events.
Changes in the ratio, or the difference between supply and the flow of new production, are particularly sensitive to halving. In the past, the price of Bitcoin rose up to 93 times.
By analyzing recoveries before and after the halving, the company found that, on average, prices tend to peak after 2.6 years. That would put current projections at August of next year.
While not an exact science, the stock-to-flow model has been a popular tool in the crypto industry as a means of analyzing the true value of Bitcoin.
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Exceeding gold
Jurrien Timmer, director of global macro at Fidelity, said in February that the world’s largest cryptocurrency could reach a valuation of US$1.5 trillionexceeding that of gold by US$500 billion.
He used a variation of the model to show Bitcoin’s scarcity and value proposition compared to gold.
Pantera joins others in making six-figure predictions for Bitcoin, including research firm Bernstein’s $150,000 punt in mid-2025.
Skybridge Capital Founder Anthony Scaramucci Sees $170,000 or higher next year, while Thomas Lee of Fundstrat Global Advisors also said it could reach $150,000 in 2024 and $500,000 over the next five years.
Crypto Market Movers
- Bitcoin fell 2% to $61,000 in the last 24 hours.
- Ethereum fell 0.6% to $2,970.
What are we reading
Sebastian Sinclair is a market correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.