Pantera Capital compared the current strengthening of bitcoin with the bull run of 2017, and also assessed its own forecasts for BTC and the prospects for the Ethereum exchange rate.
Pantera Capital analysts in the January newsletter decided to pay attention to the fundamental differences between the 2017 bubble and the current situation in the crypto market. They also analyzed the dynamics of the BTC exchange rate after the May halving and assessed the potential of Ethereum, considering it undervalued in comparison with Bitcoin.
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“You can’t praise yourself …”
In addition, Pantera Capital did not fail to praise itself a little for the fairly accurate forecasts for the current bitcoin rate, made back in April 2020. Then Pantera experts presented long-term forecasts for the further dynamics of military-technical cooperation, taking into account the impact of the May halving on it.
Source: Pantera Capital
The company proceeded in its estimates from such theoretical aspects as the ratio of supply and demand and its influence on the price. Although the market lagged 15 weeks behind forecasts in the summer of 2020, the gap subsequently began to narrow. As a result, by the end of December, the BTC market quotations caught up with the Pantera estimates. Moreover, by mid-January, the price of bitcoin was even one week ahead of the forecast.
Source: Pantera Capital
If Pantera’s predictions continue to come true, then on February 15, 2021, one bitcoin may cost $ 45,268. Meanwhile, on August 1, the BTC rate may reach $ 115,212.
It’s different this time
In addition, the company decided to highlight a number of differences between the current crypto boom and the 2017 bubble. So, experts pointed out that this time the market is clearly dominated by Bitcoin and Ethereum. They now account for about 86% of all market volumes.
Meanwhile, in 2017, this figure was only about 50%. The second half of the market was formed at that time by “mostly non-functional tokens”. “It’s obvious that new brilliant business ideas simply couldn’t be born at 50 each week,” analysts admit.
In this regard, they acknowledge that in 2017 we were dealing with an unconditional bubble generated by ICO fever. Now the market is booming, but not a bubble. Investors have a better understanding of the market situation. In addition, an important feature of 2020 was the active involvement in the crypto space of large institutional investors…
Ethereum is undervalued?
Pantera did not ignore the second cryptocurrency of the world – Ethereum, for which 2020 also turned out to be very successful. The company’s analyst Joey Krug noted that the Bitcoin dominance index is already at the top of its range, and this may shift the market focus in favor of Ethereum.
In addition, he also mentioned such a financial criterion as the price / earnings ratio (P / E multiple)… Its low values traditionally indicate an undervalued asset. In the case of ETH, this indicator, according to Krug, lags significantly behind the growth rate of its use.
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The Circle also considers the prospects for ETH in 2021 to be optimistic due to factors such as the launch of the updated Ethereum 2.0 protocol, the continued growth of the decentralized finance segment (DeFi) and the imminent launch of futures on the ETH CME Group.
At the same time, the Circle urged not to compare Ethereum to Bitcoin, “since digital gold and the DeFi industry are two completely different things.”