Pantera Capital’s CEO Dan Morehead appeared on CNBC on Dec. 22 saying that institutional buyers have created a shortage of Bitcoin. He also added that institutional spending on the cryptocurrency has resulted in the price of the cryptocurrency to go upwards. According to him, big institutional players such as PayPal, Square Inc., Grayscale, and MicroStrategy are buying more bitcoin than it can be mined daily. For instance, the recent $650 million purchase from MicroStrategy was worth more than 20 days of mined bitcoin.
Institutional Buyers Driving Bitcoin Price: Pantera CEO
The Pantera CEO believes there are also risks regarding the potential for a bearish market despite the increased interest from institutional investors. Recent setbacks in the crypto market include SEC actions against Ripple, Ledger hardware hack, and a potential stringent regulation on self-hosted wallets. He adds:
“It’s very, very early days for a brand new asset class so there’s going to be volatility on both sides.”
Morehead also added that mainstream media focuses mainly on the setbacks associated with the cryptocurrency. For instance, it doesn’t cover a growing base of consumers that finds the cryptocurrency to be useful.
Its utility being consumers’ investment in the cryptocurrency as a form of wealth creation as well as use its international remittance. Despite the perceived risk, the growing adoption is still likely to drive the price of the cryptocurrency.
Bitcoin’s 2020 Rally Different from One in 2017
Morehead highlighted the increased adoption of the cryptocurrency saying the price of Bitcoin around $200 six years ago was $200 with a million people using the network. Today, the price of the cryptocurrency sits above $20,000 and has more than one hundred million people on its network.
The Pantera CEO even added that Bitcoin’s price spike in 2020 is entirely different from the one that took the cryptocurrency to its all-time high back in 2017.
Looking at the current buying spree of institutions in the largest cryptocurrency by market capitalization one can soon expect BTC to touch the $30,000 mark in the coming year.