Pantera Capital Management, a cryptocurrency hedge fund with more than $800 million in assets, believes that bitcoin will not go under $6,500 in this seemingly slowing market. In a note to investors, the fund mentioned that the pioneer cryptocurrency’s prices would most likely exceed their previous high of $20,000 in late December 2017.

Long Convictions

Since January 2018, bitcoin’s value has been slowly declining. Despite the following prices, however, Dan Morehead and Joey Krug, CEO and co-chief investment officer of Pantera Capital, announced to investors that “a wall of institutional money will drive the markets much higher.”

Although the cryptocurrency markets have been historically volatile, the hedge fund recommends others to buy soon as the 200-day moving average shows positive signs.

“For those who are new to Pantera who might think a fund manager like Pantera would always be saying ‘Today’s a great day to get long.’ I rarely have such strong conviction on timing,” said Morehead and Krug.

The hedge fund has only made three buy and one sell recommendations since investing in Bitcoin in 2014.

Some Worry that Bitcoin Is a Bubble

Despite Pantera Capital Management’s bullish belief on rising prices, many believe that the bitcoin bubble will soon pop. To better contextualize this argument, Bloomberg recently drew attention to other historically famous bubbles like the Mississippi Company, the Dutch Tulips, and the South Sea Company.

Bitcoin Bubble Comparison

(Source: Bloomberg)

According to the above chart, it’s easy to assume that Bitcoin’s value will follow in the same trajectory as similar historically notorious crashes. However, this may not be a fair comparison since the cryptocurrency is also used as a means of payment while other examples in the chart are physical commodities and shares of companies.

Noah Smith, a journalist from Bloomberg View, reported a potential reason why this is the case. Smith mentions that “until there is a way to bet against an asset, its price will be set by the most upbeat buyer.” A famous paper popularized the concept by J. Michael Harrison and David Kreps in 1987.

While it’s uncertain whether Pantera Capital Management’s 200-day average approach will pan out as follows, especially since there are many mixed opinions concerning Bitcoin’s future price, many investors remain confident in Bitcoin’s long-term future.

Active Investors Are Confident According to Survey

In other, more optimistic news, a report by Huobi concluded that 77.6 percent of investors believe the total market value of cryptocurrency assets will increase over the next three months. The survey was fairly broad, with 1,787 individuals from 23 different nations to gain an overall perspective from investors on the future of cryptocurrencies.

Blockchain Capital partner Spencer Bogart at the beginning of 2018 also predicted that Bitcoin’s future price could increase to $50,000 in 2018.

“Institutional investors that want to play in this market, even if they do, they are going to wait a little bit and either dip their toes in the water or just wait on the sidelines until they see the products themselves function,” Spencer told CNBC.

Pantera Capital Management had a rocky start to 2018, primarily when Bitcoin’s volatility caused the fund to lose 45.7 percent of its value in March, “which [was] the worst in [their] model’s 27-month history,” said Krug in the investor letter.

However, since the 200-day moving average is quite positive and often reflects the market’s long-term trend, Bitcoin’s prices may soon turn over from it’s all-time low this year.

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