Dan Morehead, founder and CEO of Pantera Capital, described the current valuation gap between cryptocurrency and AI stocks as the widest he has ever observed. Speaking at a New York event on Tuesday, he labeled AI stocks as fully priced after a strong run, while calling crypto “incredibly cheap.”
Widest Divergence Ever: Bitcoin 43% Below Trend
According to Pantera’s internal data, the index of leading AI companies trades at “33% over its log trend of the last four years.” Meanwhile, bitcoin has fallen 43% below its own historical trajectory. “It’s the biggest divergence we’ve seen in history,” Morehead said. The gap reflects lopsided investor enthusiasm: AI enjoys massive fundraising rounds and rising public valuations, while crypto struggles to regain momentum despite broader adoption and U.S. regulatory progress.
Institutions Still Missing: Room for Future Demand
“The majority of institutions still don’t get it. They still don’t have any exposure,” Morehead stated. He noted that only a minority of large investors currently hold digital assets. This limited participation, in his view, leaves significant room for future inflows—unlike AI, where growth expectations have already been priced in quickly.
Cycles and Macros: Crypto’s Dual Rationale
Morehead also pointed to structural cycles in crypto markets. “The four-year cycle is real,” he said, referring to bitcoin’s supply schedule. If past patterns hold, the market may remain in a weaker phase near term, even as long-term outlook stays positive. He tied crypto’s appeal to macro trends, describing digital assets as a hedge against currency debasement driven by inflation and monetary expansion. “It’s actually all those things aren’t moving. It’s a massive devaluation of paper money,” he added.
Finally, Morehead sees convergence between AI and blockchain. Pantera has invested in several projects at that intersection. “There’s really no world in which AI is important that crypto isn’t part of it,” he concluded.