Pantera Capital: Crypto is Entering a New Bull Market Cycle

Pantera Capital, one of the leading venture capital firms in the blockchain and cryptocurrency space, has published its latest monthly newsletter, in which it claims that the crypto market is entering a new bull market cycle that will last for another 18 to 24 months.

According to Pantera, the current market conditions are favorable for crypto price growth, as several positive factors are converging, such as:

  • The removal of some of the regulatory uncertainty that has been weighing on the crypto industry, especially in the US, where the SEC has approved the first Bitcoin exchange-traded fund (ETF) in October 2023, opening the door for more institutional and retail investors to access the crypto market.
  • The halving of Bitcoin’s block reward, which is expected to occur in late April 2024, reducing the supply of new bitcoins by 50%. This is a historically bullish event for Bitcoin, as it creates a supply-demand imbalance that drives up the price. Pantera estimates that the halving will increase Bitcoin’s stock-to-flow ratio, a measure of scarcity, from 27 to 54, making it comparable to gold.
  • The development of decentralized finance (DeFi) on Bitcoin, which is expanding the use cases and utility of the leading cryptocurrency. Pantera cites the example of Starknet, a layer-2 scaling solution that enables fast, cheap, and secure transactions on Bitcoin, as well as Arbitrum, a smart contract platform that leverages Bitcoin’s security and liquidity. Pantera also mentions the growing interest in real-world assets (RWAs) and their tokenization on the blockchain, which could create new opportunities for crypto investors and users.

Pantera believes that these factors will create strong tailwinds for the next bull market, which it considers to be the fourth big cycle in crypto history. The previous cycles were:

  • The first cycle, from 2009 to 2013, which saw Bitcoin emerge as a new form of digital money and reach a peak of $1,163 in November 2013.
  • The second cycle, from 2013 to 2017, which witnessed the rise of altcoins, such as Ethereum, and the emergence of initial coin offerings (ICOs), as well as the first major crypto bubble and crash, with Bitcoin reaching a high of $19,783 in December 2017.
  • The third cycle, from 2017 to 2021, which was marked by the development of DeFi, non-fungible tokens (NFTs), and stablecoins, as well as the adoption of crypto by mainstream companies, such as PayPal, Tesla, and MicroStrategy, and the second major crypto boom and bust, with Bitcoin hitting a record of $69,044 in November 2021.

Pantera expects the fourth cycle to be driven by the maturation of the crypto industry, the innovation of new technologies and protocols, and the integration of crypto with the traditional financial system. Pantera’s investment portfolio reflects its bullish outlook on the crypto market, as it includes such projects as Starknet, Arbitrum, Near, Ondo, SynFutures, Circle, and others.

Pantera concludes its newsletter by stating that “the absence of bad things” is a good thing for crypto, as it allows the market to focus on the positive developments and trends that are shaping the future of the industry.

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