Venture Capital Pantera: The fourth cycle in the crypto space is approaching, Bitcoin halving could see $140,000

Pantera listed several reasons in the February "Blockchain Letters" open letter, emphasizing the arrival of the fourth cycle in the cryptocurrency space.

No Bad News is Bearish

Pantera believes that the current lack of bad news is a crucial theme. Throughout most of 2022 and 2023, various rare and crazy bad events have been occurring, with 2022 being the worst year for a 60/40 stock and bond investment portfolio since the Great Depression.

The blockchain market has been hit hard, along with absurd leveraged behavior from six lending institutions such as FTX and Celsius, but this has not killed blockchain.

Bitcoin: The Most Overlooked Asset in the World

Pantera lists data on a certain asset:

• $900 billion market cap, 60% higher than Visa

• $260 billion daily trading volume, 250% more than Apple

• 50% annualized volatility, 20% lower than Tesla

• Over 220 million global holders (only six countries have a population over 220 million)

This asset is Bitcoin, and Pantera states:

Bitcoin has been ignored and excluded by global "mainstream" financial institutions for a decade. Would launching a spot ETF satisfy you?

Pantera points out that despite the massive scale of Bitcoin, financial services and financialization levels are still relatively low. If the Wall Street financial system does not embrace Bitcoin, then Bitcoin will have to build its own financial system, such as widespread financial services in Latin America and Africa.

Recent technological breakthroughs in Bitcoin are helping its development in payments and DeFi.

Technological Breakthroughs in Bitcoin

Former head of Facebook's Meta coin and payments division David Marcus, after joining the Bitcoin infrastructure company Lightspark last year, stated that developing on the Lightning Network and Bitcoin is ten times more challenging than on other protocols.

Bitcoin BTC Drops Below 25K, Former Head of Facebook Coin Interviewed: Making Bitcoin a Global Payment Network

However, Pantera lists several technological advancements, indicating that Bitcoin is moving towards a breakthrough in DeFi:

• Taproot upgrade (November 2021)

• Ordinal inscriptions (January 2023)

• BRC-20 tokens (March 2023)

While following different development paths, Pantera believes that a decentralized financial system based on Bitcoin may eventually emerge, with potential similar to or greater than DeFi on Ethereum.

The market value of Ethereum DeFi applications currently accounts for about 25% of Ethereum. Assuming Bitcoin can achieve the same proportion in DeFi, Pantera expects the total market value of DeFi applications on Bitcoin to reach $225 billion, 25% of Bitcoin.

Over time, this figure may range between $72 billion and $450 billion, 8% to 50%.

The top DeFi protocols on Bitcoin could eventually be valued at $20 billion, 2.2% of Bitcoin, entering the top ten in cryptocurrency market value.

Bitcoin Halving Narrative: Aiming for $148,000

Pantera made halving predictions when Bitcoin was at $17,000 in 2022. They pointed out that while halving has always been emphasized as a "big event," the overall market needs several years to adapt.

A typical bottom appears about 1.3 years before halving, and on average, the market reaches its peak 1.3 years after halving, totaling 2.6 years to see all the effects of halving.

Currently, the price of Bitcoin has far exceeded the previous prediction of $35,448.

Pantera expects the peak of the post-halving surge to be in August 2025, with Bitcoin potentially reaching $148,000 by then.

Pantera also mentioned the developments of the dYdX exchange and the Bitcoin L2 project Stacks in the article, along with the negative impressions of FTX from various sectors, which will gradually popularize on-chain transactions.