The blockchain investment fund, Pantera Capital, has completed its seven months, and its Bitcoin fund has generated a lifetime return of 15,140% net fees and expenses, “outperforming bitcoin over the same period.”
Pantera Bitcoin Fund provides institutions, and high-net-worth individuals access to large quantities of bitcoin without the burden of safekeeping them. It also offers daily liquidity, but most of its investors are long-term hodlers, with an average holding period of 841 days.
Bitcoin’s high volatility, 75% annualized volatility, is the most common concern of institutions in its adoption but also the reason behind such prominent gains, which made it the best performing asset class of the last decade.
Also, it used to be a lot higher and will be a lot lower in the next few decades, that’s just the way new asset classes work. “Volatility exists because it’s still a young asset class — bitcoin is just a teenager,” reads Pantera’s report released on Wednesday.
Despite this high volatility, bitcoin’s annual price low has been higher than the previous year’s low every time except for one year in its ten-year life.
Bitcoin Just a Tiny Fraction of All the Markets it can Disrupt
In 2020, bitcoin acted like a risky asset as it crashed along with the majority of the asset classes due to coronavirus pandemic. Starting last week, the digital asset started its journey as a digital gold — a safe haven asset and a hedge against inflation, as it went in the opposite direction of the S&P 500.
Bitcoin is currently trading around $11,000 after breaking two important key levels $10,000 and $10,500 earlier this week. BTC/USD is up over 50% YTD. Amidst these gains also came the green light from OCC that is now letting all nationally chartered banks in the U.S. provide custody services for digital assets.
It’s clear that bitcoin has many use cases, sometimes a store of value and others a centralized settlement system.
In terms of an alternative SoV to gold, bitcoin is just 2% of yellow metal’s $9 trillion market and as money, even a smaller fraction.
“With all these potential markets to disrupt, it really comes down to how many people choose to use it,” wrote Dan Morehead, CEO of Pantera.
“A few years ago, there were half a million people using it for speculation, commerce, remittances, and more. Now there are probably 50 million people using bitcoin and cryptocurrencies. And in a few years, if a billion people are using it, it’s going to be worth a lot more. It’s just supply and demand,” he said.