- Pantera Capital CEO Dan Morehead has warned that a Bitcoin ETF could drop the Bitcoin price
- Morehead says that the awarding of a Bitcoin ETF would be a ‘sell the news’ event
- Others have already said that a Bitcoin ETF could have the opposite impact to Bitcoin’s price
The prospect of a Bitcoin ETF causing a market crash has been echoed by Dan Morehead, the CEO of Pantera Capital. There has been much talk of a futures-based Bitcoin ETF being awarded in 2021, and while many in the space believe that such news will precipitate a massive green candle, the number of people who believe it will be a ‘sell the news’ event is growing. Back in January JPMorgan strategists predicted that the awarding of a Bitcoin ETF could bring “negative near-term implications for Bitcoin”, although the reasons for this may have been slightly negated in 2021.
Morehead to “Take Some Chips Off the Table”
In a piece entitled The Next Price Era which was sent to Pantera investors on Sunday, Morehead noted that the saying of ‘buy the rumor, sell the news’ was “definitely working in our space”. Morehead compared the CME Bitcoin futures launch in December 2017, which prompted the end of that bull run, with the Coinbase Nasdaq launch in April. This event transpired to be the moment that the early 2021 bull run topped out, and Morehead thinks that a Bitcoin ETF will have the same effect this time round:
We recently repeated that cycle. The whole industry reveled in Coinbase’s upcoming direct listing. The bitcoin market was up 822% coming into the day of the listing. Bitcoin peaked at $64,863 that day and a -53% bear market started. Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table.
JPMorgan Echoed Bitcoin ETF Fears
A group of JPMorgan strategists headed by Nikolaos Panigirtzoglou echoed these same thoughts in January, although their thesis was based on a “cascade” of outflows from Grayscale’s Bitcoin fund once the ETF was approved. With Grayscale having endured a mini crisis in 2021 already however, which included halting inflows and buying back its own shares, that particular element is seemingly no longer a concern, although the ‘sell the news’ element certainly is.
