Dan Morehead, founder and CEO of Pantera Capital, believes that the cryptocurrency market is undervalued in comparison to artificial intelligence stocks, which have experienced a significant surge. Morehead expressed this view at a New York event, stating that the divergence between the two sectors is one of the largest he has witnessed. He noted that while AI is crucial, its current pricing seems overly inflated. In contrast, he described the crypto market as 'incredibly cheap'.
Pantera's internal data supports this perspective, with an AI company index trading 33% above its four-year log trend, whereas bitcoin has fallen significantly below its historical trajectory, making it 43% undervalued. This disparity arises as investor interest has shifted towards AI, with substantial funding and rising public market valuations.
Meanwhile, the crypto market has struggled to regain momentum despite increased adoption and regulatory progress in the US. Morehead emphasized that most institutions still lack exposure to crypto, leaving room for future demand. He also highlighted the structural cycles in crypto markets, referencing bitcoin's supply schedule and suggesting that the market may remain in a weaker phase in the near term. Morehead tied crypto's appeal to broader macro trends, describing digital assets as a hedge against currency devaluation.
He also noted the convergence between AI and blockchain technologies, arguing that the two sectors are interconnected. As capital continues to flow into AI, Morehead's thesis is based on the idea that markets will eventually rebalance, drawing attention back to underpriced digital assets.