This year, June was simultaneously bullish and bearish as the Fed raised rates to combat rising prices and cryptocurrencies dropped.
Additionally, according to industry experts, cryptocurrencies have shown impressive ties to stocks, frequently moving in tandem during trade, imitating Bitcoin, which is expected to keep expanding through the rest of 2022 and beyond.
Amidst the current bear market slump, it could be helpful to read the opinions of the CEO of Pantera Capital, Dan Morehead.
Potential Rebound in the Coming Months
In a recent CNBC interview, Dan Morehead predicted a divergence between cryptocurrencies and conventional assets, including equities, bonds, and real estate.
The hedge fund CEO was quite sure that the value of the digital assets is likely to go up in a year while traditional assets tend to fall due to higher interest rates.
“One of our core beliefs is that while interest rates have a mathematical impact on bonds, it almost has to impact stocks and will undoubtedly be a target for the Feds [Federal Reserve Bank]; there are some asset classes, such as cryptocurrencies, that should be uncorrelated or disconnected from the interest rate markets.”
He clarifies that it didn’t go that way as crypto has been significantly correlated with risk assets. He can see a year of negative downtrends in stocks and bonds but is skeptical that crypto is rallying and trading on its own- quite similar to what gold does. Alternatively, soft commodities like corn and soybeans are doing fantastic.
Underpinning the Asset Class
According to Morehead, from an investor’s standpoint, the fundamentals of crypto assets remain compelling.
He further elaborated that Crypto’s fundamentals remain strong.
“Of course, it had a massive bull market and now has a massive bear market. But in the ten years we have invested in cryptocurrencies, I have already gone through five of those (ups and downs). It’s not unusual; we’ve seen it a lot.”
Per market reports, Pantera Capitals manages Pantera assets worth $5.1 billion.