Bitcoin may have reached its bottom, says crypto hedger, and should start surging again in a couple of weeks.
Bitcoin should return to peak levels in the next couple of weeks and will continue growing from there, said digital currency investor Dan Morehead.
"There's such an institutional appetite to get exposure to this," said Morehead, who is founder and CEO of Pantera Capital, a hedge fund and investment firm that works exclusively in cryptocurrency and blockchain technology. "It's a half-a-trillion-dollar asset class that nobody owns. That's a pretty wild circumstance."
"And bitcoin is still so underowned by institutional investors that it trades at its own beat," he told CNBC's " Fast Money " on Thursday.
Pantera Capital was founded in 2003 and started its first cryptocurrency fund in 2013. It has since had returns of more than 22,000 percent, according to the Hedge Fund Research Indexes. In 2017, the firm launched an ICO, or initial coin offering, fund and a digital asset fund, receiving returns of 549 percent and 188 percent, respectively.
When bitcoin peaked in mid-December, trading around $19,500, the cryptofund was up 2,922 percent and collected more than $2 billion in assets under management. The firm was so successful that it had to raise fees to reduce inflows.
"We're certainly aware it's a very speculative market," said Morehead, who first bought bitcoin for $72 and watched the digital coins fall below $6,000 in January. "It's volatile on the upside. It can be volatile on the downside." In December, he predicted the coins would fall by 50 percent before the next big surge.
Crypto prices slowly began to creep back up this week, trading above $8,000 on Thursday . Morehead said bitcoin's bottom may be here.
Bear markets, on average, have a 71-day run, Morehead pointed out. "And we're 52 days into this," said the former hedge-fund strategist who began his career at Goldman Sachs as a mortgage-backed security trader. "It seems like another couple of weeks and everything will be normal and [bitcoin] can start growing back up again."
While his firm trades bitcoin, ethereum and ripple — "all the big ones" — he said the ones to watch are the new protocol tokens or ICO with small-caps.