Joey Krug, the chief information officer (CIO) of crypto-oriented investment group Pantera Capital, expects the cryptocurrency market to expand tenfold from its current valuation of around $210 billion to more than $2 trillion.
“If you look at that next bull run, I think the crypto space overall could hit 10x from here,” Krug told Bloomberg in an interview on Monday.
He added the market was “close to a bottom at this point,” and there are two major catalysts for a possible turnaround. One is recent developments in the crypto space, among them the increasing number of traditional financial services giants joining the nascent industry. When asked why the news of Fidelity Investments launching a crypto trading platform for institutional investors did not spur a major uptick in prices earlier this week, Krug said:
“Two years ago, that would have been a huge bull run... But I think at this point the market is really waiting for actual adoption to start to pick up.”
Hinting at the other potential market growth catalyst, Krug went on to state that “to get that, you need scalability.”
According to the Pantera executive, the current state of cryptocurrency and blockchain development is comparable to the internet before dial-up, with many investors steering clear of it. And while the mainstream momentum for the internet came through the installation of miles of physical cables, the issues with cryptocurrencies can be solved through computer science, which is a lot easier to tackle, according to Krug.
A number of cryptocurrency projects are already working on scalability enhancements. Bitcoin (BTC) is introducing Lightning Network and Liquid Network to improve its ecosystem while Ethereum (ETH) is upgrading its blockchain with sharding.
Regarding BTC, Krug expressed doubts that its transaction speed will ever be able to rival that of Visa. However, he believes “we'll see blockchains as fast as Visa or Mastercard within the next couple of years.”
Commenting on the timeframe of the next bull run, Krug said that crypto prices could continue in their current “range-bound” pattern for a while. Asked whether he really believed the market would not rebound in the next two years until scalability is solved, the CIO said:
“We could see a rebound before then, but I think that’s gonna be the real catalyst that drives the next huge bull-run in my opinion.”
Pantera Capital currently has about $800 million in assets under management. The San Francisco-based company has invested in a number of leading cryptocurrencies and distributed ledger technology companies, with its portfolio including Bitstamp, Polychain Capital, Korbit, 0x, and Zcash. Some of its recent investments include sharing economy startup Origin and stablecoin project Basis. In July, Pantera revealed it had generated returns of over 10,000% since its inception five years ago.