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  • Dan Morehead, CEO and founder at investment firm Pantera Capital, believes that DeFi will outperform Bitcoin in the next five years.

    In a recent interview with Cointelegraph, Morehead said that despite the poor performance of Pantera’s altcoin funds in 2019, the situation has flipped in the last few months because of the explosive growth of decentralized finance protocols and tokens.

    At the end of August, Pantera’s digital assets fund was up 123% year to date. “The world has woken up to DeFi and capital has flowed into the space”, he said.

    According to him, Bitcoin has already established itself as digital gold and an effective store of wealth. So, he thinks its upside potential is relatively limited.

    “It maybe could go to a million (…) but that’s really the edge of possibility because you’re getting into a number that’s $20 trillion in all money on Earth is only $100 trillion”.

    On the other hand, DeFi is still at its infancy and largely undervalued considering its potential to disrupt the traditional financial sector –  therefore its huge potential for appreciation and will probabely outperform bitcoin. He said:

    “It’s much more likely that the entire DeFi space goes up a 100x over the next five years than Bitcoin.”

    Some analysts believe that based on DeFi’s growth, we should consider Ethereum more successful than Bitcoin.

    While it’s still kind of tough to picture it overtaking, or flipping Bitcoin’s market cap, Ethereum’s DeFi-driven growth spurt has put enough pieces in motion to paint a cogent picture of how “the flippening” could play out in reality.

    The main catalyst is the large quantity of Bitcoin wrapped on Ethereum.

    Wrapped Bitcoin can be either a relatively successful money-type token on Ethereum, or Ethereum is now Bitcoin’s most successful sidechain.

    The contest is not remotely close either. There is now about a billion dollars of Bitcoin in total on Ethereum according to DeFi pulse, and just $26 million on Liquid and $11 million on Lightning. Unfortunately for Bitcoin, every coin wrapped onto Ethereum is probably good for ETH and bad for BTC.

     

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