After Bitcoin was halved, Pantera’s founder said: This is the entry moment you most shouldn’t miss.

This is the 2219th original issue of Plain Talk Blockchain
Translated by | Plain Talk Blockchain
Produced by | Plain Talk Blockchain (ID: hellobtc)

In this interview, Wilfred Frost has a second in-depth conversation with Dan Morehead, founder of Pantera Capital. They discuss Bitcoin’s cycle positioning after a 50% retracement from its high; how fiat currency devaluation creates generational wealth conflicts; and why this round of “smart money” is actually the last to enter.

Highlights Summary

• Most institutional investors’ positions in blockchain are still 0.0%, literally zero.

• It’s not gold reaching a new high, but paper money hitting a historic low.

• This may be the first “smart money” trade in history to enter last.

• The average age of first-time homebuyers in the U.S. has been delayed from 28 to 40.

• We are facing a generational turning point where currency is decoupling from the state.

• Stablecoins are very likely to take half of bank deposits within ten years.

• Bitcoin has reached escape velocity, and I see no factors that could derail this process.

• If you have no blockchain exposure, in some sense, you are already shorting this trend.

01

“Still the most asymmetric trade in history”

Host: Last time you came, we delved into the macro logic of cryptocurrencies. You bought Bitcoin at an astonishingly low price—what was it again?

Dan Morehead: $65.

Host: $65, compared to today’s roughly $66,000, it’s a whole different world. In that episode, you described Bitcoin as “the most asymmetric trade in history.” Do you still hold that view today?

Dan Morehead: Yes, I still believe that. Throughout my career, I’ve been looking for asymmetric opportunities where the upside potential far exceeds the downside risk. Bitcoin, and the broader crypto space, is the most asymmetric trade I’ve seen.

Early on, I would tell people: you could completely lose all your principal, so don’t invest more than you can afford to lose. But at the same time, you could get 5x, 10x, or even thousands of times returns.

The reason I remain optimistic is that we are still in very early stages. Most institutional investors’ positions in blockchain and crypto are still 0.0%. Literally zero. As long as the downside risk is negligible relative to the enormous potential to redefine the entire monetary system, this asymmetry will persist.

02

Four-year cycles have proven true again

Host: Our last recording was on October 12, a very interesting timing. Around October 6, cryptocurrencies hit a cyclical high, followed by a correction. Since then, Bitcoin has fallen about 50%. As someone who has experienced multiple cycles, how do you interpret this big drop?

Dan Morehead: Anything that aims to change the world is accompanied by a lot of hype and volatility. Euphoria at the highs, pessimism at the lows. Pantera has been deeply involved in this industry for 13 years, experiencing four complete four-year cycles. These cycles are actually very regular, even predictable.

When we met in October, we were near the high point predicted by our models from two or three years ago. Based on the first three cycles, we estimated Bitcoin would reach a cyclical high around August 2025. Although we hoped for a different outcome—perhaps new government policies could break the cycle—in hindsight, the cyclical pattern once again proved self-fulfilling. The market retreated 50%. It sounds like a lot, but compared to previous cycles with 85% drops, this is much milder. The market may need about a year to bottom out, consistent with past patterns.

Host: You didn’t seem bearish at the time. Do you think this cycle will ultimately fall 75% to 80% like previous ones?

Dan Morehead: That’s a key question. I didn’t predict such a deep fall at the time because there were many positive factors. But markets have their own rhythm. I want to point out that in previous peaks, prices deviated far from the long-term logarithmic trend line, showing parabolic behavior. For example, in 2013, the price quadrupled in the four months before the high. This time, the price didn’t show that extreme overheating; it’s roughly back to 2021 levels.

So I think the current price range is probably near the bottom. It may take another six to eight months to fully bottom out, but with a four- to five-year investment horizon, now is a very attractive entry point.

Host: The current price is around $66,000. Many technical analysts say that $60,000 is a key support level, and if it breaks, it could fall all the way to $25,000. Do you agree?

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

03

Why is Bitcoin always the first to be hit?

Host: Why does Bitcoin always seem to be the “punching bag” among risk assets? When Nasdaq and S&P 500 top out, cryptocurrencies are often the first to be sold off. Will this always be the case?

Dan Morehead: That’s a very perceptive observation. Think about it: if a major shock occurs outside trading hours Monday through Friday, you can’t sell stocks. But cryptocurrencies are the only market with a $2 trillion scale, open 24/7 globally, with high liquidity.

When geopolitical crises erupt, institutions want to reduce risk exposure immediately, and Bitcoin becomes their only asset that can be liquidated in real time. This causes it to bear excessive short-term selling pressure. But note that while correlation spikes during “flash crashes,” over the long term, Bitcoin’s correlation with the S&P 500 is actually very low, around 0.1 to 0.2. Over multi-year horizons, cryptocurrencies tend to move independently upward, while traditional assets may just stagnate.

04

It’s not gold reaching a new high, but paper money hitting a historic low

Host: Let’s talk about gold. Over the past 12 months, gold has risen 55%, while Bitcoin has remained flat. Does this shake the narrative of Bitcoin as “digital gold”?

Dan Morehead: Gold is an interesting “old-school” asset. It periodically comes into the public eye. Before 2025, gold ETFs have actually experienced net outflows for several years, while funds flowed into Bitcoin ETFs. But by 2025, people suddenly realize the dollar is rapidly devaluing, and this sense of urgency causes funds to flow back into gold.

But my perspective on this isn’t about gold or real estate hitting new highs; it’s about paper money hitting a historic low. As the printing presses run nonstop, the amount of paper money needed to buy a fixed amount of assets keeps rising. The word “pound” originally represented a pound of pure silver, but now you need hundreds of paper notes to buy the same weight of silver. Governments can print money infinitely, and that’s the core of devaluation.

Host: Are we not in an incredible devaluation cycle right now?

Dan Morehead: Absolutely. The Fed defines “price stability” as a 2% annual devaluation, which is already absurd. Stability should be zero. Even at 2% per year, a person’s purchasing power would shrink by nearly 90% over a lifetime. (Editor’s note: with compound interest, at 2% annual devaluation, purchasing power shrinks about 80% over 80 years.) I think people are waking up to the fact that they must hold hard assets with fixed quantities—stocks, gold, or cryptocurrencies.

This devaluation trend also has clear generational characteristics. Massive money printing pushes asset prices higher, benefiting the older generation who already own property and stocks, while squeezing the upward mobility of the young. The average age of first-time homebuyers in the U.S. has been delayed from 28 to 40. Since traditional paths to wealth are blocked, it’s very rational for the younger generation to turn to cryptocurrencies. Looking at the wage and housing price growth curves since 1990, the divergence has become absurd.

05

Separation of currency and the state

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

Dan Morehead: War always brings persistent inflation. But more importantly, we are witnessing a “separation of currency from the state.” In ancient times, money was gold, inherently independent of governments. Later, governments monopolized the power to print money, but history shows they haven’t managed it well.

In the next decade, people will increasingly realize that currency doesn’t need government backing. Geopolitical conflicts make this trend clearer—the world is becoming factionalized. If you are a country not aligned with the U.S., or worried about your assets being sanctioned or frozen, you will want an asset that isn’t controlled by any single country. China once invested heavily in U.S. Treasuries with foreign exchange reserves, but in today’s geopolitical landscape, that’s increasingly risky. Bitcoin, as an asset independent of banking systems and sanctions, gains even more value amid conflicts.

06

“Smart money” finally enters last

Host: How many people actually hold cryptocurrencies? Are large institutional positions common worldwide?

Dan Morehead: Still very few. Although hundreds of millions globally hold crypto, most are small, “hobbyist” holdings. But I believe that within ten years, due to the proliferation of smartphones (around 4 billion users worldwide), most people will use cryptocurrencies. They offer fast, almost free cross-border transfers, without needing anyone’s permission.

This may be the first time in history that “smart money” enters last. Over the past 40 years, I’ve seen all investment opportunities where Wall Street eats first, retail investors buy last. But this time, it’s completely reversed—individual investors are leading the charge. I’ve spoken with many hedge fund managers managing hundreds of billions, many of whom know nothing about Bitcoin.

That’s why I’m so optimistic—these smart, wealthy institutional funds will eventually enter. Coinbase is now part of the S&P 500. If you have no blockchain exposure, in some sense, you are already shorting this trend.

07

Policy shifts from hostile to supportive

Host: The new government’s attitude shift is a key variable in this cycle. How do you assess the current policy environment?

Dan Morehead: It’s a huge tailwind. The previous administration was hostile to blockchain, targeting Coinbase and cracking down on Ripple. Now, the current government is willing to build this industry. Although legislative progress is always slow, frankly, the fact that Congress is even discussing “stablecoin market structure” indicates a fundamental change in the industry’s status.

Regarding stablecoins, this is a phased revolution. Currently, stablecoins may not pay interest across the board, but that’s just a matter of time. Stablecoins are already eating into the bank deposit market. Today, stablecoins total about $400 billion, while bank deposits are around $17 trillion. (Editor’s note: as of March 2026, stablecoin market cap is approximately $300-320 billion, according to DefiLlama, CoinDesk, and other data sources.) Over the next decade, stablecoins could take half of bank deposits because they are available 24/7 on mobile devices and offer a far better experience than traditional banks.

08

Will there be a strategic Bitcoin reserve for governments?

Host: You’re also watching digital asset treasuries like MicroStrategy. Do you think governments will establish strategic Bitcoin reserves in the future?

Dan Morehead: I think that’s very likely. The U.S. already has a certain amount of digital assets, mostly seized through law enforcement. They are no longer selling these assets and may even start accumulating more. Countries allied with the U.S. will follow suit for strategic reasons, while adversaries will buy for defensive purposes. It will take time to push this through the political machinery, but the trend is irreversible.

09

Why Solana?

Host: In Layer 1 competition, why do you particularly favor Solana?

Dan Morehead: We hold Bitcoin long-term, but Bitcoin focuses on store of value. It can’t handle tens of thousands of transactions per second needed for high-frequency trading. Solana was designed for high performance—cheaper, faster, suitable for gaming, high-frequency trading, and complex applications. Just as Google and Facebook are core Layer 1s for the internet, there will be a few key Layer 1s in blockchain. Bitcoin is like gold, while Solana might be the digital highway.

10

Is it reasonable that Nasdaq fell 12% while Bitcoin fell 50%?

Host: Nasdaq dropped 12.5% from its high, while Bitcoin fell 50%. Is this disconnect reasonable?

Dan Morehead: I think it’s very unreasonable. Currently, stock valuations are at historic highs, with very low risk premiums, and interest rates remain high, making stocks very expensive relative to bonds. The AI sector also shows signs of overheating, with many AI company valuations far exceeding trend lines.

In contrast, cryptocurrencies are about 50% below their long-term trend line. From an asset allocation perspective, cryptocurrencies are in a highly attractive oversold zone. Even if Nasdaq continues to decline, I believe cryptocurrencies will perform better over the next two years.

11

“I see no factors that could derail this process”

Host: How is your mindset now compared to during the bear markets of 2014 and 2018?

Dan Morehead: Completely different. In the early days, I had moments of cold sweat, worried that this entire experiment could be wiped out by a hack or regulatory crackdown. But after Mt. Gox’s collapse, multiple 85% retracements, and regulatory crackdowns, the industry not only survived but grew stronger. It has reached escape velocity.

Host: Is there any event that could make you completely give up on the bullish outlook?

Dan Morehead: A few years ago, I listed a long risk checklist, including custody security, hacking, regulatory uncertainty. But looking back now, most of those risks have been addressed. Of course, no one can guarantee that surprises won’t happen tomorrow, but logically, I can’t find any factors that could completely derail this process. The globally connected, smartphone-based monetary system is an inevitable direction for human society. With 4 billion mobile users worldwide, the financial inclusion brought by blockchain is far more important than sharing photos on social media.

Original link:
Original title: Crypto Winter or Buying Opportunity? Dan Morehead’s 4-Year Outlook
Original author: The Master Investor Podcast with Wilfred Frost
Translation: Plain Talk Blockchain