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Pantera Capital, a crypto investment firm, has announced that it will rotate back into altcoins from Bitcoin and Ethereum for the first time since the spring.
The move comes as cryptos have shown a modest rally in January after the market saw a rout in 2022, with Bitcoin losing over 60% of its value.
Pantera Capital Turns Bullish on Altcoins
According to Pantera’s Co-Chief Investment Officer Joey Krug, the firm moved into Ethereum last year “to try to avoid further drawdowns,” but has now started to rotate back into altcoins that they believe will “outperform ETH over the coming cycle.”
The Liquid Token Fund, which typically invests in 15 to 25 liquid tokens at a time, fell 80% in 2022 but is currently up 47% this year.
Krug stated that 2022 was a “very brutal year for risk assets in general,” but with the market showing signs of recovery, Pantera is optimistic about the potential of altcoins. The Bloomberg Galaxy Crypto Index fund was down 72% in 2022 and up nearly 40% in January, compared to the Liquid Token Fund’s performance.
Pantera Capital’s decision to rotate its capital back to altcoins is also a reflection of the increasing popularity and interest in decentralized finance (DeFi) projects. Many of these projects are powered by altcoins, and the firm believes that they have the potential to disrupt traditional finance and reshape the financial landscape.
The firm’s move back to altcoins comes at a time when the market is showing signs of renewed activity, with many investors and traders keeping a close eye on the crypto space for any signs of a potential altseason.
Established in 2013, Pantera Capital is one of the oldest investment firms in the crypto industry and has a history of making well-informed investment decisions. Its latest move into altcoins highlights its confidence in the potential of these digital assets and the future of the crypto market.
Time for Altseason?
The start of a new altseason in the cryptocurrency market remains uncertain, as the hallmark of this phenomenon, stratospheric price jumps, has yet to occur. In the previous bull run of 2020-2021, several altcoins experienced explosive growth, with some seeing their prices increase by 100 to 400 times.
Despite a recent correction, Bitcoin continues to see upward momentum and its price remains 11% higher over the past week. The leading cryptocurrency has maintained its dominance, as indicated by the Bitcoin Dominance (BTCD) index, which currently stands at 44.4. This index measures the level of control that Bitcoin exerts over the broader crypto market and has been trending upward since January 10th.
To kickstart a new altseason, it would be crucial for the BTCD index to reverse its upward trend and dip below the 38 support level. This, however, is a rare occurrence in the market, with Bitcoin usually driving the market’s overall direction.
Top 5 Altcoins to Watch in February 2023
This week marks the launch of the Cardano (ADA) overcollateralized stablecoin. Additionally, the network upgrade for Filecoin (FIL) is imminent, while the PRIMAL mainnet will go live.
Meanwhile, Flux (FLUX) is set to halve its block rewards and Internet Computer (ICP) will host a meetup to discuss the most intriguing Decentralized Finance (DeFi) projects. These events are expected to bring attention to these altcoins, help prices turn volatile, and generate excitement in the crypto community.
Overall, Pantera Capital’s rotation back to altcoins is a positive sign for the crypto market and reflects the firm’s confidence in the growth potential of this exciting and rapidly-evolving sector.