Bitcoin posted a classic “Uptober,” but risk assets across the board risk a serious contraction, forecasts warn.
Bitcoin (BTC) will “reassert” itself to deliver over 100% annual BTC price gains, says one of the crypto industry’s major proponents.
In an interview with CNBC airing Oct. 5 and published Oct. 31, Dan Morehead, CEO of hedge fund Pantera Capital, predicted continued crypto expansion.
Morehead: “We could easily see” 40% stocks meltdown
Bitcoin closed October up 29%, seeing its second-best month of 2023 and returning to 18-month highs in the process.
Eyeing macroeconomic conditions, however, Pantera’s Morehead and others are concerned about another risk asset class — what he describes as “massively overvalued” stocks.
“Equities are overvalued because the P/E is the same level it was when rates were falling, but now rates are much higher and rising,” he told CNBC.
“If you took the 50-year average equity risk premium with a 5.00% 10-year note, equities should be 23% lower than today.”
Morehead referred to changing macro conditions in the United States, with interest rates at their highest in over 2 years.
“I’m not saying -43% is going to happen overnight, but we have to keep in mind there have been two 13-year periods where equities were flat – in the 2000s and in the 70’s, 80’s,” he continued on the topic.
“We could easily see that again.”
Despite the grim prognosis, Morehead was complimentary of both Bitcoin and the largest altcoin, Ether (ETH), predicting the former to more than double every year, in line with average performance to date.
“Bitcoin has a 14-year trend growth of 145% a year,” he stated.
“That’s my generic forecast – it will re-assert its trend and will more than double every year.”
BTC price risks prehalving collapse
The good times for BTC price performance may only follow a fresh bout of pain for hodlers.
Related: Bitcoin beats S&P 500 in October as $40K BTC price predictions flow in
Prior to the 2024 block subsidy halving, some are concerned that a major retracement could enter.
For Filbfilb, co-founder of trading suite DecenTrader, the timing will likely focus on a month before the halving — around March next year.
A month before or so seems the meta.
— filbfilb (@filbfilb) November 1, 2023
Should this come as a result of an equities comedown, the scenario is not clear cut.
As Cointelegraph reported, Bitcoin has nonetheless managed to ditch its positive correlation to stocks, something which research firm Santiment this week called a classic early bull market signal.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.