Pantera Capital anticipated that “Tax Day” and the effects of the Fed’s policy might enhance bitcoin’s price in the near future.
Despite recent market volatility, Pantera Capital anticipated a spike in bitcoin’s price in the next weeks. According to the investing business, one of the propellers may be ‘Tax Day.’ Additionally, the cryptocurrency business may eventually break away from established financial markets and begin trading independently, according to the firm.
Bitcoin’s performance over the previous few months has been rather gloomy. While many proponents anticipated it to trade above $100,000 by the end of 2021, it ended the year below $50,000, and the start of the new year resulted in further declines.
February 24th was another down day for the asset, as the military crisis between Russia and Ukraine resulted in large price declines. Today, however, BTC has recouped the majority of its losses and is just short of $39,000.
Pantera Capital offered many reasons why bitcoin might restart its bull run in the near future in its study titled “The Next Mega-Trade.” Among them is the impending “Tax Day,” which falls on April 18th this year.
The business said that in 2013, 2017, 2020, and 2021 (previous huge run-ups), bitcoin’s price increased dramatically 35 days before the event. However, each time around that day, the asset lost some ground as investors sold their shares to pay taxes.
“That makes a certain amount of sense. Many cryptocurrency traders are new to investing. Consider a person purchasing as many bitcoins as possible. Because they are “all-in” on cryptocurrency, the only option for them to obtain funds to pay their tax due is to sell it. Prices decrease in the run-up to Tax Day.”
Cryptocurrency Could Become Independent of Financial Markets
Pantera Capital also discussed the Fed’s response to the COVID-19 epidemic. The business described the enormous production of fiat currencies, Treasury market manipulation, and bond mortgages as a “obviously incorrect” combination.
Additionally, it criticised the US central bank for growing inflation and economic turbulence inside the country’s boundaries. According to Pantera Capital, there is a bubble that will collapse, forcing the Fed to boost interest rates even higher. This, according to CEO Dan Morehead, sounds like fantastic news for the world of digital assets:
“I am a firm believer that the markets are getting this wrong and that the increase in interest rates (which I believe was inevitable and will continue to occur) is not all that terrible for crypto. And, in comparison to other asset classes, is really rather favourable for blockchain values.”
Following that, Pantera Capital thinks the cryptocurrency business will establish itself as a distinct financial speciality, eliminating the need for conventional monetary market fluctuations:
“And hence, we believe that over the following several weeks, crypto will effectively divorce from regular markets and resume trading on its own.”
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