Bitcoin dropped under $20,000 yet again, dragging several other altcoins with it. Though macroeconomic concerns put further pressure on crypto, this dip might be because various financial institutions and crypto hedge funds have been liquidating or have been forced to shut down part of their investments.
Values in the global cryptocurrency industry fell by -5.91% in the last 24 hours, accounting for a greater loss than in recent days.
Pantera Capital To Invest In Altcoins?
Meanwhile, Pantera Capital’s Dan Morehead argues that the Federal Reserve has been committing critical errors for quite a long time. Therefore, these blunders are now affecting the cryptocurrency space, contributing to a massive breakdown in the coming days.
The fall of Terra, according to Morehead, is an illustration of an unstable economic framework. He even used Celsius as an example to point out firms with poor-risk techniques. Additionally, even Three Arrows Capital, a struggling cryptocurrency investment company, cannot repay its debts. These occurrences are referred to as the “big collapse” by Dan Morehead.
The founder believes there will likely be a couple more such failures in the next month or two and added that each failed indebted firm produces a series of issues for its creditors.
Morehead also revealed that his firm funded a significant portion of its holdings in Bitcoin in late May. However, now, the firm may think about exiting Bitcoin and investing in relatively riskier, higher-reward altcoins if it is indeed undeniable that the crypto space has hit bottom.
Even after having long-term optimistic views on some of these assets, he stated, to reduce potential losses, Pantera boosted its Bitcoin position when the market collapsed.
Cryptocurrencies Trade Parallel To Stocks
The year 2022 saw Cryptocurrencies plummeting as the FED raised interest rates to combat rising costs. In this context, cryptocurrencies have shown remarkable connections with equities, often advancing in parallel throughout the trade.
Per Dan Morehead, the correlation between Bitcoin and equities has historically strengthened with significant dips in the S&P 500, but the pattern will eventually flip.
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