Dan Morehead, founder and CEO of Pantera Capital, believes that the cryptocurrency market is undervalued in comparison to AI stocks, which have experienced a significant surge. Speaking at a New York event, Morehead noted that the divergence between the two sectors is one of the largest he has seen. He stated that although AI is crucial, it appears to be fully priced at the moment. In contrast, he described the crypto market as 'incredibly cheap.' Pantera's internal data supports this view, with an AI company index trading 33% above its four-year log trend, while bitcoin has fallen below its historical trajectory, making it 43% undervalued.
Morehead attributed this disparity to the fact that most institutions still don't understand crypto and have limited exposure, leaving room for future demand. He also pointed to the four-year cycle in crypto markets, which could keep the market in a weaker phase in the near term.
Morehead argued that digital assets serve as a hedge against currency devaluation and described a future where AI and blockchain technologies converge, with Pantera investing in projects at the intersection of these sectors. He believes that as capital continues to flow into AI, markets will eventually rebalance, drawing attention back to underpriced digital assets.