Dan Morehead, founder and CEO of Pantera Capital, believes that the cryptocurrency market is undervalued compared to artificial intelligence 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 valued at present, whereas cryptocurrency is 'incredibly cheap'. Pantera's internal data supports this view, showing that an AI company index is trading 33% above its four-year trend, while bitcoin has fallen 43% below its historical trajectory.
Morehead attributes this disparity to investor enthusiasm for AI, which has led to substantial funding and rising public market valuations. In contrast, crypto has struggled to regain momentum despite broader adoption and regulatory progress in the US. Morehead noted that most institutions still lack exposure to cryptocurrency, leaving room for future demand.
He also pointed to the four-year cycle in crypto markets, which could lead to a weaker phase in the near term. Additionally, Morehead tied crypto's appeal to macro trends, describing digital assets as a hedge against currency debasement.
He sees a convergence between AI and blockchain technologies, with Pantera investing in projects at their intersection. Morehead argued that the two sectors are linked, stating that there is no scenario in which AI is important without crypto being part of it. Pantera views crypto as a relative value trade, with Morehead's thesis resting on the idea that markets will eventually rebalance, drawing attention back to underpriced digital assets.