After Bitcoin halved, Pantera founder says: This is the best entry point you shouldn't miss.

Compile: Plain-Language Blockchain

In this interview, Wilfred Frost sat down for a second deep-dive conversation with Dan Morehead, the founder of Pantera Capital. They discussed how Bitcoin should be positioned in the cycle after a 50% pullback from its peak; how fiat currency debasement creates intergenerational wealth conflict; and why this round of “smart money” is actually the last to enter.

Highlights

Most institutional investors’ exposure to blockchain is still 0.0%—literally zero.

It wasn’t gold making new highs; it was paper money making record lows.

This could be the first trade in history where “smart money” is the last to enter.

The average age of first-time homebuyers in the U.S. has already shifted from 28 to 40.

We’re facing an intergenerational turning point where money becomes separated from the nation.

Stablecoins will very likely take half of bank deposits within the next decade.

Bitcoin has already reached escape velocity—I can’t find any factor that could derail this process.

If you have zero blockchain exposure, to some extent you’re already shorting this trend.

01 “Still the most lopsided trade in history”

Host: Last time you came, we dug into the macro logic behind crypto. At what price was your first Bitcoin buy surprisingly cheap—what was it?

Dan Morehead: 65 dollars.

Host: 65 dollars—compared with today’s roughly 66,000 dollars. That’s like two different worlds. In that episode, you described Bitcoin as “the most lopsided trade in history.” Do you still stand by that view today?

Dan Morehead: Yes, I’m still convinced. Throughout my entire career, I’ve been looking for asymmetric opportunities where the upside potential is far greater than the downside risk. Bitcoin—and the broader crypto space—are the most asymmetric trades I’ve ever seen.

In the early days, I would tell people: it’s entirely possible to lose all your principal, so don’t put in more than you can afford to lose. But at the same time, you could get returns of 5x, 10x, or even a thousand times.

I still believe the reason is that we’re still in the very early stages. Most institutional investors’ positions in blockchain and crypto are still 0.0%. Literally zero. As long as the downside risk is insignificant compared with the vast scale of global financial assets—and as long as the upside potential is large enough to redefine the entire monetary system—this asymmetry won’t disappear.

02 The four-year cycle proves itself again

Host: We recorded last time on October 12, and the timing was interesting. Around October 6, crypto reached a local high, followed by a pullback. Since then, Bitcoin has fallen by about 50%. As someone who’s been through multiple cycles, how do you interpret this drop?

Dan Morehead: Anything that tries to change the world comes with a lot of hype and volatility. When you’re at the highs, optimism runs wild; when you’re at the lows, it’s full of pessimism. Pantera has been in this industry for 13 years and has experienced four complete four-year cycles. These cycles are actually very regular—and even predictable.

When we met in October, we were right near the high point we had predicted one to two years earlier. Based on our models from the first three cycles, we expected Bitcoin to reach a local high around August 2025. Back then, we hoped to see different results—like new government policy breaking the cycle—but looking back, the cycle pattern has once again fulfilled itself. The market pulled back 50%. That sounds like a lot, but compared with previous cycles’ 85% drawdowns, this is actually relatively mild. The market may still need about a year to build a base, which is consistent with past patterns.

Host: At the time, you didn’t come across as bearish. Do you think this cycle ultimately falls like the previous ones—down 75% to 80%?

Dan Morehead: That’s the key question. I didn’t actually predict it would drop that much, because there were many positive factors at the time. But the market has its own rhythm. What I want to point out is that at prior cycle highs, the price deviated far above the long-term log trend line and showed a crazy parabolic trajectory. For example, in 2013, in the four months before the high, the price went up by 10x. But this time, the price didn’t show that kind of extreme overheating—it mostly just reverted back to the 2021 level.

So I think the current price is roughly in the bottoming range. Even if it takes another six to eight months to build the base, if you have a four- to five-year investment horizon, this is a very attractive position.

Host: Right now the price is around 66,000 dollars. Many technical analysts say 60,000 dollars is a key support level; if it breaks, the price could keep sliding all the way to 25,000 dollars. Do you agree?

Dan Morehead: I’m not very good at that whole technical analysis thing. We never try to do super-short-term timing trades. Our capital management approach is more like venture capital, with a 5-year, 10-year, or even 20-year perspective. From that standpoint, prices are already quite cheap.

03 Why is Bitcoin always the first to get smashed?

Host: Why is Bitcoin always the “scapegoat” in risk assets? When the Nasdaq and S&P 500 hit their peaks, crypto is often the first to be sold. Does this last forever?

Dan Morehead: That’s a very sharp observation. Think about it: if there’s a major shock happening outside Monday-to-Friday trading hours, you can’t sell stocks. But crypto is the only globally liquid market at a scale of $2 trillion, open 24 hours a day all year long.

When local geopolitical crises erupt, institutions want to reduce risk exposure immediately, and Bitcoin becomes the only asset they can liquidate in real time. That causes it to absorb too much selling pressure in the short term. But note: while correlation spikes during a “flash crash” moment, over the long term Bitcoin’s correlation with the S&P 500 is actually very low—around 0.1 to 0.2. Over a multi-year horizon, crypto is moving independently upward, while traditional assets might just be treading water.

04 Not new highs for gold—new historic lows for paper money

Host: Let’s talk about gold. Over the past 12 months, gold is up 55%, while Bitcoin is basically flat. Does that shake the “digital gold” narrative for Bitcoin?

Dan Morehead: Gold is an interesting “old-school” asset. It periodically returns to mainstream attention. Before 2025, gold ETFs actually saw net outflows for many consecutive years, while money flowed into Bitcoin ETFs. But in 2025, people suddenly realized the dollar is accelerating in value erosion, and that sense of urgency sent money back into gold.

But I think about this problem differently: it’s not gold or real estate that’s making new highs—it’s paper money that’s making record lows. As the printing press keeps running, the number of dollars required to buy a fixed amount of assets must keep increasing. “Pound” originally referred to one pound of pure silver. Now you need hundreds of paper bills to buy the same weight of silver. Governments can print money infinitely—this is the core of a debasement trade.

Host: Aren’t we in an astonishing debasement cycle right now?

Dan Morehead: Absolutely. The Fed defines “price stability” as debasement of 2% per year—and that alone is absurd. Stability should be zero. Even if it debases only 2% a year, a person’s purchasing power over a lifetime would shrink by nearly 90%. (Editor’s note: using compound interest calculations, with a 2% annual debasement rate, purchasing power drops by about 80% after 80 years.) I think people are waking up—realizing that you have to hold a fixed amount of hard assets, whether that’s stocks, gold, or crypto.

This debasement trade also has a clear intergenerational characteristic. Large-scale money printing inflates asset prices, which benefits older generations who already own real estate and stocks, while compressing younger people’s upward opportunity. The average age of first-time homebuyers in the U.S. has already moved from 28 to 40. Since they can’t accumulate wealth through traditional paths, it’s a very rational choice for the younger generation to turn to crypto. If you look at the wage growth and home price growth curves since 1990, you’ll see this “scissor gap” is already to the point of being absurd.

05 The separation of money from the nation

Host: How do geopolitical conflicts change the logic of crypto?

Dan Morehead: War always brings persistent inflation. But more importantly, we’re witnessing the “separation of money from the nation.” In ancient times, money was gold—it was naturally independent from government. Later, governments monopolized the right to print money, but it turned out they didn’t manage it very well.

Over the next decade, people will increasingly realize that money doesn’t need a government stamp of approval. Geopolitical conflicts make this trend even clearer— the world is fragmenting into camps. If you’re a country that doesn’t belong to the U.S. camp, or if you worry your assets could be sanctioned or frozen, you’d want an asset that isn’t controlled by any single country. China previously put a large share of its foreign exchange reserves into U.S. Treasuries; under the current international situation, that risk is rising. Bitcoin, as an asset independent of the banking system and the sanctions regime, has its value stand out even more in a conflict.

06 “Smart money” is coming in last, of all things

Host: Right now, how many people truly hold crypto? Are there large institutional positions globally?

Dan Morehead: Still very few. Although there are three or four hundred million people who hold crypto worldwide, most have small “for-fun” positions. But I believe that within ten years, because of the spread of smartphones (4 billion users globally), most people will be using crypto. Cross-border transfers are fast, almost free, and require no one’s permission.

This could be the first trade in history where “smart money” comes in last. In all the investment opportunities I’ve seen over the past 40 years, it’s usually Wall Street that eats first, and retail investors are the ones who get stuck holding the bag last. This time is completely the opposite—individual investors are walking in at the front. I’ve shared the stage with many alternative investment giants managing tens of billions of dollars; many of them know basically nothing about Bitcoin.

That’s why I’m so bullish—these smart, well-capitalized institutional funds will eventually come in. Right now, Coinbase has been added to the S&P 500 index. If you have zero blockchain exposure, to some extent you’re already shorting this trend.

07 Policy shifts from hostile to tailwind

Host: The new administration’s shift in stance is an important variable in this cycle. How do you evaluate the current policy environment?

Dan Morehead: It’s a huge tailwind. The previous administration took a hostile approach toward blockchain, going after Coinbase and targeting Ripple. But now the government is willing to build this industry. Even though the speed of moving legislation is always frustrating, the fact that the U.S. Congress can spend time discussing topics like “stablecoin market structure” in itself shows that the industry’s status has changed fundamentally.

As for stablecoins, this is a revolution unfolding in phases. Stablecoins might not yet be paying full interest everywhere, but that’s only a matter of time. Stablecoins are eroding the market for bank deposits. Stablecoin size is currently about $400 billion, while bank deposits are $17 trillion. (Editor’s note: as of March 2026, the total market cap of stablecoins is about $300–320 billion, source: multiple data platforms including DefiLlama, CoinDesk, etc.) Over the next decade, stablecoins are extremely likely to take half of bank deposits, because they’re available on your phone 24 hours a day and the user experience is far better than traditional banks.

08 Will strategic Bitcoin reserves happen?

Host: You’re also paying attention to digital asset treasury companies, like MicroStrategy. Do you think the government will build a strategic Bitcoin reserve in the future?

Dan Morehead: I think that’s very likely. The U.S. already has some scale of digital asset reserves, mostly coming from enforcement seizures. And now they’re not just selling those assets—they may even start accumulating them. Countries allied with the U.S. will follow for strategic reasons, and countries opposing the U.S. will buy for defensive purposes. It takes time to push this through the political machine, but the trend is irreversible.

09 Why Solana?

Host: In the Layer 1 competition, why are you particularly bullish on Solana?

Dan Morehead: We hold Bitcoin long-term, but Bitcoin is focused on value storage—it can’t handle tens of thousands of high-frequency transactions per second. Solana’s design goal from the start is high performance—cheaper, faster—well-suited for complex application scenarios like gaming and high-frequency trading. The internet has a few core players like Google and Facebook. In the blockchain space, there are also a few core Layer 1 networks. Bitcoin is like gold, and Solana could be the digital highway.

10 Nasdaq down 12%, Bitcoin down 50%—is that reasonable?

Host: The Nasdaq is down 12.5% from its peak, while Bitcoin is down 50%. Is this disconnect reasonable?

Dan Morehead: I think it’s completely unreasonable. Stock valuations are at historic highs right now, and the risk premium is extremely low, while interest rates are still high—meaning stocks are very expensive relative to bonds. There are also signs of overheating in the AI space, and many AI companies’ valuations have already far exceeded their trend lines.

Looking at crypto instead, it’s 50% below its long-term trend line. From an asset allocation perspective, crypto is now in a highly attractive oversold range. Even if the Nasdaq continues to fall further, I still think crypto will perform better over a two-year span.

11 “I can’t find any factor that could derail this process”

Host: How is your mindset different now compared with 2014 and 2018, the bear markets back then?

Dan Morehead: Completely different. In the early days, I genuinely had moments where I was sweating, worried this whole experiment could be completely destroyed by a hack or regulatory crackdown. But after experiencing Mt. Gox shutting down, multiple 85% drawdowns, and waves of regulatory attacks, the industry not only didn’t collapse—it kept getting stronger. It’s already reached escape velocity.

Host: Is there any event that would make you abandon being bullish for good?

Dan Morehead: A few years ago I compiled a long list of risks, including custodial security, hacker attacks, and regulatory uncertainty. But looking back now, most of these risks have already been resolved. Of course, no one can guarantee that nothing unexpected will happen tomorrow. But logically, I can’t find any factor that could completely derail this process. A smartphone-based, globalized monetary system is an inevitable direction for human society. With 4 billion smartphone users worldwide, the financial inclusion enabled by blockchain matters far more than sharing photos on social media.