The Pantera Capital founder recently made a bullish price prediction for Bitcoin, but how could this impact altcoins like XRP?
For context, Dan Morehead, founder and managing partner at American hedge fund and venture capital firm Pantera Capital, appeared in a CNBC Squawk Box episode to discuss crypto and other related matters.
Pantera Capital Founder Predicts Bitcoin to $750,000
During the interview, host Andrew Sorkin asked Morehead where he thinks Bitcoin’s price is heading. Responding, the businessman pointed out that Bitcoin’s price has roughly doubled every year over the past 12 years.
According to Morehead, Bitcoin could continue on this growth trajectory for a few more years before it exhausts the trend. The reasoning behind his suggestion is that Bitcoin still only captures a very low share of global wealth. Specifically, Walker, the Bitcoin Podcast host, suggested in June that at $2 trillion, BTC only captures 0.2% of global wealth.
In his recent comments, Morehead suggested that this current position means Bitcoin still has more room for growth. “So, I think it (Bitcoin) could go up to $750,000 in the next four to five years,” he concluded. Notably, this price would translate to a valuation of nearly $15 trillion for BTC, making it the second-largest asset by a mile.
Possible XRP Price
Interestingly, if this projection plays out, altcoins such as XRP will likely benefit tremendously. This is largely due to the close correlation between Bitcoin and these altcoins. Notably, the pattern has continued to play out across multiple market cycles, and even recently.
According to market analytics resource Macroaxis, Bitcoin and XRP have a correlation coefficient of 0.79 over the past three months, confirming their close price relationship within this period. While this correlation could be detrimental during market uncertainties, it may be beneficial for cases such as a Bitcoin rally to $750,000.
From the current price of $115,000, Bitcoin would need to rise 552% to reach the $750,000 target in the next five years. With XRP trading for $2.97 at press time, a comparative 552% increase would push its price to around $19.2, close to the $20 milestone.
However, while such price correlations lead to identical price actions, they do not translate to exact imitations. As a result, XRP could witness a less or more impressive upsurge. Macroaxis indicated that XRP could generate 1.56x more returns than Bitcoin. Nonetheless, this also means XRP is 1.56x more volatile.
Taking this into account, if Bitcoin rallies 552%, XRP could grow by a more substantial 861%. From the current price of $2.97, an 861% increase would lead to a new all-time high of $28.54 for XRP.
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