Pantera Capital CEO Dan Morehead said the current crypto downturn appears fundamentally healthier than the bear market of 2014–2015, arguing that the industry now has stronger infrastructure and fewer existential doubts than it did in the past. In his view, the sector has matured enough to support broader institutional participation, even if that money does not arrive at the market bottom.
Stronger foundations than the last crypto winter
Speaking about the difference between the current downturn and the previous major crypto slump, Morehead said the earlier cycle came with much deeper uncertainty. At that time, market participants were still questioning whether blockchain technology would truly work at scale, while regulatory concerns also weighed heavily on sentiment. By contrast, he said the industry today stands on much firmer ground, making the present bear market less alarming than the one seen several years ago.
Morehead added that investors have talked for years about a coming wave of institutional money. According to him, the market is now much closer to meeting the conditions required for that shift, especially as the supporting infrastructure for large professional investors becomes more credible.
Institutions may follow, not lead, the next rally
Even so, Morehead rejected the idea that institutional investors will necessarily trigger the next bull run. He argued that institutions are likely to behave in a pro-cyclical way, much like other investors, meaning that the largest wave of institutional capital may not enter until prices are already moving higher. In other words, institutions may chase an established recovery rather than step in aggressively before it begins.
A key reason is custody. Morehead said institutions want custody providers that are well known and regulated, something crypto lacked in earlier years. He pointed to firms such as Bakkt, Fidelity, and Erisx as examples of companies developing institutional-grade custody solutions over the coming months, potentially removing one of the biggest barriers to entry.
Fundraising slows, but Pantera still closes in on target
Pantera also disclosed progress on its third crypto venture fund. The firm said it had raised $130 million toward a $175 million target. Pantera partner Paul Veradittikit noted that fundraising has slowed across the industry during the bear market, affecting both entrepreneurs and investment funds.
Morehead also said he expects venture capital to overtake ICOs again as the dominant fundraising model in crypto during 2019. That view suggests capital may increasingly favor longer-term company building and infrastructure development over the speculative fundraising trends that defined the previous cycle.