Bitcoin is flashing a rare buy signal, crypto hedge fund manager says

Pantera Capital CEO Dan Morehead said in an interview with CNBC's "Fast Money" on Wednesday that the worst may be over for bitcoin. Morehead argued that bitcoin, which has grown at an average of 165% per year over the five years Pantera has been in business, rarely trades below its 200-day moving average. "When it does, it's a very good time to buy," he said. He pegged $6,500 as the bottom of the current bear market. According to CoinDesk, the cryptocurrency neared that level in April, falling as low as $6,620, before recovering to roughly $8,212 by Wednesday. Morehead noted bitcoin was 65% below its high, adding that such an opportunity does not come often.

The article places the decline in the context of bitcoin's 2017 performance, when the cryptocurrency gained more than 1,300% to almost $20,000 in December. Pantera, founded in 2013 by Morehead after a career at Goldman Sachs, reported roughly 25,000% life-to-date returns as of last December. Its Bitcoin Fund, however, is down more than 50% in 2018, though it still shows over 10,000% gains since inception, according to the firm's most recent investor letter. The firm had earlier reported that the value of its cryptocurrency fund was cut nearly in half in March.

Pantera's investor letter also showed its Digital Asset Fund was down just 3.1% net of fees since Dec. 1, compared with a 37.4% decline in bitcoin over the same period, though the fund fell 45.7% in March alone. In the prior letter, Morehead said investors would still profit even if bitcoin collapsed as Pets.com did during the dot-com era, comparing the situation to a portfolio of IPOs in which one large winner offsets the losers.

Pantera, which manages roughly $800 million in assets, also launched its third blockchain-focused venture fund last month. The fund will target peer-to-peer transactions, fintech, artificial intelligence and machine learning.