Pantera Capital CEO warns of Bitcoin sell-off after ETF approval

Approval of a SEC exchange-traded fund (ETF) based on Bitcoin could weigh on its price. This was stated by Pantera Capital CEO Dan Morehead.

12-month rallies heading into Coinbase’s IPO and CME Bitcoin futures launch — both of which marked cycle peaks — were 9.2x and 25.4x

Someone remind me the day before the #bitcoin ETF launches — might take some chips off.

Till then, I’m buying.

More: https://t.co/g46sxp7Qe6 pic.twitter.com/4oJfXd9wX5

— Dan Morehead (@dan_pantera) October 7, 2021

«After the temporary frenzy amid fears that China’s mining ban would wreck the industry, and the heated debates about its environmental impact, we entered a new bull market», — he wrote in a note to investors.

The upside could be sustained by a possible ETF launch, Morehead argues.

«There is a Wall Street adage ‘Buy the rumor, sell the news.’ This definitely works in our space», — he explained.

He cited two past events that triggered this market wisdom: the launch of Bitcoin futures on the CME and Coinbase’s stock-market debut. In the first case, digital gold subsequently fell by 83%; in the second — 54%.

By the time derivatives on the Chicago Mercantile Exchange launched, Bitcoin had formed a peak. Before that, under the mantra ‘We\’re going to the moon’, it rose by 2,440%, Morehead noted. The story repeated with Coinbase’s direct listing — previously the leading cryptocurrency had risen 822%, after which a bear market began.

Morehead did not rule out the possibility of a similar pattern arising in the Bitcoin ETF scenario.

«Please remind me a day before the official launch of the Bitcoin ETF. Okay? Maybe I’ll want to take a few chips off the table», the expert commented.

The Pantera Capital CEO expressed optimism about Bitcoin’s medium- and long-term prospects.

«Bear markets like those that emerged in 2017 are part of our ‘primordial’ past. In the future they will be more moderate. Unfortunately, there is no free lunch. The flip side of that will be the absence of a hundredfold rally in a year», he explained.

As a reminder, the driver of bitcoin’s ascent to new highs since May has been expectations of a positive decision on a Bitcoin ETF — in August, Bloomberg analysts predicted SEC approval of the instrument by the end of October.

Earlier JPMorgan as reasons for the rally cited institutional interest, the growing popularity of the Lightning Network, and assurances by U.S. authorities that there were no intentions to ban cryptocurrencies.

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