Crypto Hedge Fund Founder: Ethereum Goes to $500

For some people, the price drops of the past few months have been an early Christmas present, for others it has been the death knell. But there are indications that we haven’t hit the bottom yet. In any case, the founder and manager of crypto hedge fund Pangea thinks we will fall even further.

Shares still too expensive

pangea Fund Management only exists a few monthsbut it has a few big investors, including Bain Capital and ParaFi. Terra founder Do Kwon is also said to have a position within the fund, although that was before the crash of Terra (LUNA). It is unknown if he is still able to hold his position.

Co-founder Daniel Cheung writes in a huge thread on Twitter that he think stock markets (like those on the NASDAQ) could still fall sharply† The index is only down 30%, so another 20% is definitely possible. Most funds would still not expect a recession, even though it is likely.

Inflation even higher?

He also thinks inflation could get worse in July and August. For example, there is no less travel, and in the summer months the demand for oil is much higher. House prices are also likely to remain high, and it is also likely that food prices will continue to rise.

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If so, then central banks will continue to raise interest rates. With that they want to curb inflation, and that is a problem for assets.

Short on Ethereum

According to the fund manager, Ethereum (ETH) is therefore a huge opportunity to go short. If you go short, you hope to make a profit on a falling price. He thinks this will take about two months.

He emphasizes that crypto is very sensitive to the mentioned macroeconomic conditions at the momentt† cryptocurrencies to be now highly correlated to growth stocks. Should the NASDAQ fall another 20%, it is likely that Ethereum about 40% drops† according to Cheung. At the same time, he is talking about an ether price of $500, which is more than a 50% drop from this point.

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