All eyes are turned to the DeFi which never ceases to surprise by constantly pushing back the limits with its record performances. All of this has obviously led analysts to affirm that it would end up beating traditional finance by continuing on this path. This time around, it is another economic mastodon that would be threatened by decentralized finance. Indeed, Dan Morehead – CEO and founder of the investment company Pantera Capital – is convinced that DeFi will surpass Bitcoin in the next five years.
Bitcoin’s growth potential is relatively limited
It was during an interview with Cointelegraph that Mr. Morehead shared his prediction for the Defi and the leading cryptocurrency. He took the opportunity to point out the poor performance of the investment company’s Altcoin funds in 2019. However, the CEO of Pantera claims that this situation has been reversed, thanks to DeFi. The explosive growth of its protocols and tokens would have enabled Pantera Capital in particular to achieve very good figures in recent months.
Indeed, the company’s digital asset fund showed a 123% increase over the previous year at the end of August. The fund manager rightly attributes the credit for this upturn to DeFi, to which huge amounts of capital have continued to flow. At the same time, Mr. Morehead said Bitcoin has confirmed its status as digital gold that is an effective store of wealth. He, therefore, concluded that the growth potential of cryptocurrencies is relatively limited.
DeFi is more likely to grow 100 times over the next five years
Like others before him, the CEO of Pantera Capital also played the game of Bitcoin price predictions. “It could be as high as a million (…) but that’s really the limit of what is possible because it’s $20 trillion; all the money on Earth is only $100 trillion,” he said.
Conversely, the much younger DeFi would be greatly undervalued, he said, because of its potential to disrupt traditional finance. It would therefore have a large margin for growth to the point of exceeding the value of bitcoin in the near future. Mr. Morehead said that it is “much more likely that the entire DeFi space will grow 100 times over the next five years than Bitcoin.
This is not the first analysis of the potential of DeFi and its impact on the rest of the industry even if it comes from much more than a personal opinion. The DeFi movement is still a recent phenomenon, and it is complex to know what will actually happen. Everyone has their own prognosis, and what is certain is that the main centralized platforms are dedicated to it, like Binance!