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Three Massive Catalysts Could Push Crypto Into Bullish Territory: Hedge Fund Pantera Capital

Digital assets-focused investment firm Pantera Capital has the conviction three big catalysts could spark the next crypto bull run.

In a new blog post, Pantera Capital portfolio manager Cosmo Jiang names the likelihood of an eventual approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) as one of the more notable catalysts for another bull run. 

Jiang says BlackRock’s application of for a Bitcoin ETF is a signal to other investors that crypto has become a legitimate asset class.

“Most notably are potential spot Bitcoin ETF approvals. In particular, BlackRock’s filing is a big deal for two reasons. First, as the largest asset manager in the world, BlackRock is subject to intense scrutiny and only makes decisions after careful consideration. BlackRock is choosing to double down on the digital assets industry even amidst the regulatory fog and current market climate.

We see this as a signal to investors that crypto is a legitimate asset class with a durable future. Secondly, we believe an ETF will increase access to and demand for the asset class faster than most would anticipate. In recent news, the U.S. appeals court ruled in favor of Grayscale in their lawsuit against the SEC’s denial of their spot Bitcoin ETF application last year. We believe this substantially increases the chances that spot Bitcoin ETF applications by firms like BlackRock, Fidelity, and others will be approved, potentially as soon as mid-October.”

The second catalyst that Jiang names is an improving regulatory environment, which he says is perhaps evident by two big lawsuit victories over the U.S. Securities and Exchange Commission (SEC) by payments firm Ripple and digital asset manager Grayscale.

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“Regulatory clarity is important, not only for the protection of consumers, but also for entrepreneurs who need the proper frameworks and guidance in order to have the confidence to create new applications and unlock innovation.”

The third catalyst that Pantera’s portfolio manager names is the acceleration of the scaling capabilities of blockchain, using two fast-growing Ethereum layer-2s as examples.

“Lastly, crypto is in what we call its “dial-up-to-broadband moment”. We’ve alluded to this before in prior letters about how crypto is at a point much like the internet was 20 years ago. Scaling solutions for Ethereum like Arbitrum or Optimism are making tremendous progress, and we are seeing an increase in transaction speeds at lower cost and the capabilities that come with it.

Similar to how we could not envision the breadth of internet businesses that were created after internet speeds accelerated from dial up to broadband, we think the same will happen with crypto. In our view, we have not seen anywhere close to the proliferation of new use cases that will come out of this massive improvement in blockchain infrastructure and speed.”

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