Pantera Capital CEO Dan Morehead says Bitcoin has reached its bottom and now is the perfect time to buy.
"Something that’s growing that fast hardly ever gets below its 200-day moving average," he told CNBC’s Fast Money. "When it does, it's a very good time to buy."
Morehead said $6,500 was the bottom of the bear market. The cryptocurrency neared that threshold in April, falling to a low of $6,620. Bitcoin was back up to $8,212 on Wednesday, but it lost more than 40% of its value this year.
Morehead's firm returned 25,000% when Bitcoin hit its all-time high.
The cryptocurrency is 65% below its high, he said. "You don't get that opportunity very often," Morehead said.
Last year was a record year for the cryptocurrency. In 2017, Bitcoin gained over 1,300% to hit nearly $20,000 in December. The surge helped Pantera return 25,000% life. Today, its Bitcoin Fund is down by more than 50%. Still, the fund has returned more than 10,000% life- to-date.
In an investor letter published earlier in the month by the firm, Morehead said there was still opportunity to make money in Bitcoin even if the cryptocurrency flops.
"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," he said.
Pantera has about $800 million in assets under management.
It's not surprising that Morehead is still bullish on Bitcoin. The firm announced its third venture fund focused on blockchain technology. The new fund will focus on Fintech, P2P transactions, machine learning and artificial intelligence (AI).
Since Dec. 1, the firm's Digital Asset Fund was only down by 3.1% compared to Bitcoin, which was down 37.4% in the same time period.
Bitcoin is still highly volatile, however, unlike traditional currencies, the cryptocurrency's value is primarily based on perceived value. The U.S. dollar, one of the most traded currencies in the world, has also had periods of volatility. Between 1985 and 1995, the dollar's overall value fell sharply. That was around the time of the Latin America debt crisis. Because Bitcoin is still so new, its ups and downs can be the result of a myriad of factors.
The unpredictability of the cryptocurrency is what has many investors abandoning the idea altogether. But Morehead believes Bitcoin will return to the $20,000 mark by the end of the year.
Not everyone has been scared off by Bitcoin's bumpy past. Take Square Inc., for example. In early 2018, Square Cash introduced the trading of BTC. That investment appears to have paid off.
Analysts at Nomura Instient say the company will see a "healthy" boost to its first-quarter earnings because of this new feature. It is speculated that share prices will hit $15 per share.
Dan Dolev, analyst at Nomura Instient, says the company could earn an additional $125 in revenue per user.
Square CEO Jack Dorsey is also expecting big things from cryptocurrency. He has said that Bitcoin could become the "world's single currency" in the future.
Disclosure: The author does own any stake in the listed equities
