Dan Morehead, chief executive officer (CEO) and co-chief investment officer of struggling cryptocurrency hedge fund Pantera Capital, recently claimed that even if bitcoin fails like Pets.com did during the dot-com bubble, the hedge fund would still see investors make money.
According to CNBC, Morehead’s reasoning was that cryptocurrencies are revolutionary and here to stay. Using now-defunct Pets.com to explain his point, he said:
“If you had a portfolio of IPOs — one was Pets.com and one was Amazon.com — it doesn’t matter what the rest were. You made a great return.”
Morehead’s words came in a letter sent to investors. It noted that in case bitcoin flops like Pets.com – which filed for bankruptcy in 2000 – did, then they will still “probably do very well.” Using Pantera’s ICO Fund as an example, he pointed out that it would still be positive for them after the Fund, which is made up of 25 ICOs, went down to “single-digit number of blockchains,” and saw 90 percent of the ICOs go to zero.
Per the letter, Pantera´s ICO Fund lost about 25 percent of its value last year, but is still up more than 200 percent since it was created. The hedge fund’s Long-Term ICO Fund is up 5.9 percent, and its Digital Asset Fund is down 16.8 percent. Pantera’s Bitcoin Fund has fallen 26.9 percent this year, but since its inception is up 16,000 percent.
According to the hedge fund’s CEO, bitcoin is the “miracle whip of finance.” In his letter he advised investors to have 1 or 2 percent of their portfolio invested in blockchain technology. He reasoned:
“I am not certain that blockchain will return 20,000% again. However, the odds are high enough that when you sum the probabilistic weighted outcomes the expected value is the most asymmetric trade I’ve ever seen.”
Morehead also revealed he is bullish on ICOs, as he expects their boom to be “very much like the 1990s IPO boom,” but much bigger. ICOs have recently been under pressure, as the US Securities and Exchange Commission (SEC) recently issued “dozens” of subpoenas.
Morehead further pointed to Amazon CEO Jeff Bezos’ strategy with his company. Amazon was a majority investor behind Pets.com. Although the company eventually filed for bankruptcy, Bezos still created “an insane amount of wealth.”
This, because he “understood how disruptive the internet precools that preceded bitcoin would be.” Bezos’ investment strategy was to put his money in more than one dot-com company, to make sure he had exposure to the ultimate winners, Morehead added.
Amazon’s shares are now up over 4,000 percent since Pets.com went bankrupt, and Bezos is one of the richest people on earth as he’s worth over $130 billion. As covered by CCN, an Amazon subsidiary has notably registered Ethereum and Cryptocurrency-related domain names last year.
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Source : CryptoCoinNews