Original video title: Crypto Winter or Buying Opportunity? Dan Morehead’s 4-Year Outlook

Original video source: The Master Investor Podcast with Wilfred Frost

Original text compiled by: Baihuachain

In this interview, Wilfred Frost and Dan Morehead, founder of Pantera Capital, held a second in-depth conversation. They discussed the cycle positioning after Bitcoin retreated 50% from its peak; how fiat currency debasement creates generational wealth conflicts; and why this round of “smart money” is actually the last to enter.

Key takeaways

· Most institutional investors’ positions in blockchain are still 0.0%—literally zero.

· It isn’t that gold made new highs; it’s that paper money hit historical 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 shifted from 28 to 40.

· We’re facing a generational turning point where money is separated from the nation.

· Stablecoins are very likely to take half of bank deposits within a decade.

· Bitcoin has already reached escape velocity, and I can’t find anything that would derail this process.

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

01, “Still the Most Asymmetric Trade in History”

Host: Last time you were here, we dug into the macro logic of crypto. The price when you first bought Bitcoin was surprisingly low—what was it again?

Dan Morehead: $65.

Host: $65—compared with today’s price of around 66,000, it’s like two different worlds. In that episode, you described Bitcoin as the “most asymmetric trade in history.” Do you still stand by that view to this day?

Dan Morehead: Yes, I’m still convinced. Throughout my entire career, I’ve always been looking for those asymmetric opportunities where the upside potential far outweighs 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: You could very well lose all your principal, so don’t put in money beyond what you can afford to lose. But at the same time, you could get returns of 5x, 10x, or even thousands of times.

The reason I’m still bullish is that we’re still in the very early stage. Most institutional investors’ positions in blockchain and cryptocurrency are still 0.0%. Literally zero. As long as the downside risk is insignificant relative to the massive scale of global financial assets, and the upside is redefining the entire monetary system, this asymmetry won’t disappear.

02, The Four-Year Cycle Again Proves Itself

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

Dan Morehead: Anything that tries to change the world comes with a lot of hype and volatility. When it’s at the high, optimism runs rampant; when it’s at the low, it’s full of pessimism. Pantera has been in this industry for 13 years, going through four complete four-year cycles. These cycles are actually very regular—so regular that they can even be predicted.

When we met in October, we were right around the high point we predicted two or three years ago. Based on the models from the first three cycles, we expected Bitcoin to hit a local peak around August 2025. Although we hoped this time would produce different results—like a new government policy breaking the cycle—looking back, the cycle pattern again proved self-fulfilling. The market pulled back 50%. That sounds like a lot, but compared with previous cycles’ 85% drawdowns, this time is actually much milder. The market may still need about another year to form a bottom, which is consistent with past patterns.

Host: At the time, you didn’t sound bearish. Do you think this cycle will ultimately fall like before—down 75% to 80%?

Dan Morehead: This is a key question. I didn’t predict the drop would be that much, because at the time there were many positive factors. But the market has its own rhythm. What I want to point out is that in previous cycle peaks, prices deviated far from the long-term logarithmic trend line, showing a crazy parabolic trajectory. For example, in 2013, in the four months before the peak, the price went up 10x. But this time, the price didn’t show that kind of extreme overheating—it just roughly reverted to the level we saw in 2021.

So I think we’re roughly in the bottom-range right now. Even if it may still take another six to eight months to form a base, if you have a 4-to-5-year investment horizon, this is a very compelling entry point.

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

Dan Morehead: I’m not good at that kind of technical analysis. We never try to time trades on an ultra-short-term basis. Our way of managing capital is more like venture investing—we’re looking at 5 years, 10 years, even 20 years. From that perspective, today’s prices are already quite cheap.

03, Why Is Bitcoin Always the First One to Get Hit?

Host: Why is Bitcoin always the “scapegoat” among risk assets? When the Nasdaq and the S&P 500 top out, crypto is often the first to be sold. Will this keep happening forever?

Dan Morehead: This is a very sharp observation. Think about it: If a major shock happens outside trading hours—Monday through Friday—you can’t sell stocks. But cryptocurrency is the only highly liquid market on a global scale of $2 trillion and open 24 hours a day, all year long.

When local geopolitical crises break out, institutions want to reduce risk exposure immediately, and Bitcoin becomes the only asset they can liquidate in real time. This causes it to take far too much selling pressure in the short term. But note that while correlation spikes during a “flash crash” moment, in the long run, Bitcoin’s correlation with the S&P 500 is actually very low—around 0.1 to 0.2. On a multi-year horizon, crypto moves independently to the upside, while traditional assets may just move sideways.

04, Not Gold Making New Highs—It’s Fiat Creating Historical Lows

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 tends to come back into mainstream focus periodically. Before 2025, gold ETFs actually saw net outflows for many consecutive years, while money flowed into Bitcoin ETFs. But in 2025, people suddenly realized that the dollar is accelerating in debasement, and that sense of urgency brought money back into gold.

But the way I think about this issue is different: It’s not that gold or real estate created new highs—it’s that fiat money is setting historical lows. As the printing press keeps running, the number of paper dollars needed to buy a fixed amount of assets must keep rising. The word “pound” originally referred to a pound of pure silver; now you need several hundred banknotes to buy the same weight of silver. Governments can print unlimited money—that’s the core of the debasement trade.

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

Dan Morehead: Absolutely. The Fed defines “price stability” as debasement of 2% per year—which is already absurd. Stability should be zero. Even if it’s only 2% per year, a person’s purchasing power over a lifetime would shrink by nearly 90%. (Editor’s note: Using compounding, at a 2% annual debasement rate, purchasing power drops by about 80% after 80 years.) I think people are waking up—realizing they must hold a fixed quantity of hard assets, whether that’s stocks, gold, or cryptocurrency.

This debasement trade also has a clear generational characteristic. Large-scale money printing boosts asset prices, which benefits older generations that already hold real estate and stocks, while squeezing the upward opportunity set for younger people. The average age of first-time homebuyers in the U.S. has shifted 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 cryptocurrency. If you look at wage growth and home price growth curves since 1990, you’ll see this “scissor gap” has become absurdly large.

05, The Separation of Money and 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 and the nation.” In ancient times, money was gold—it was naturally independent of government. Later, governments monopolized the right to print money, but it turns out they managed it poorly.

Over the next decade, people will gradually realize that money doesn’t need government endorsement. 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 you worry that your assets might be sanctioned or frozen, you’ll want an asset that isn’t controlled by any single nation. China once invested large portions of its foreign exchange reserves into U.S. Treasury bonds; under today’s international landscape, that risk is only getting bigger. As an asset independent of the banking system and the sanctions regime, Bitcoin’s value stands out even more during conflicts.

06, “Smart Money” Actually Comes in Last

Host: Right now, how many people actually hold crypto? Are there truly large institutional positions on a global scale?

Dan Morehead: Still very few. Even though there are three to four hundred million people worldwide who hold cryptocurrency, most of them have small “for-fun” positions. But I think that within a decade, because of the widespread adoption of smartphones (4 billion users globally), most people will use cryptocurrency. Its cross-border transfers are fast, almost free, and don’t require anyone’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 that take the last bite. This time is completely the opposite: individual investors are walking in at the front. I’ve shared stages with many alternative-investment heavyweights who manage hundreds of billions of dollars, and many of them know nothing about Bitcoin.

That’s exactly why I’m so bullish—these smart, well-resourced institutional funds will eventually enter. Right now, Coinbase has been included in the S&P 500 index. If you have no exposure to blockchain, to some extent you’re already shorting this trend.

07, Policy Shifts from Hostile to Tailwind

Host: The attitude shift of the new administration is an important variable in this cycle. How do you assess the current policy environment?

Dan Morehead: It’s a massive tailwind. The previous administration took a hostile stance toward blockchain—hounding Coinbase and going after Ripple. And now the government is willing to build this industry. While the pace of legislative progress always makes people impatient, frankly speaking, the fact that the U.S. Congress can spend time discussing topics like “stablecoin market structure” alone shows that the industry’s status has undergone a fundamental change.

Regarding stablecoins, this is a revolution unfolding in phases. At the moment, stablecoins might not yet be able to pay interest in full, but that’s just a matter of time. Stablecoins are already eating into the market for bank deposits. Currently, stablecoin size is 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: DefiLlama, CoinDesk, and other data platforms.) Over the next decade, stablecoins are very likely to take half of bank deposits, because they’re available on your phone 24 hours a day with a far better user experience than traditional banks.

08, Will a Strategic Bitcoin Reserve Come?

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

Dan Morehead: I think this is extremely likely. The U.S. already has a digital asset reserve of some size, most of which comes from law-enforcement seizures. And now they are no longer selling these assets—and they may even start adding to them. Countries allied with the U.S. would follow for strategic reasons, and countries opposing the U.S. would buy for defensive purposes. This takes time to push through the political machinery, but the trend is irreversible.

09, Why Solana?

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

Dan Morehead: We hold Bitcoin long term, but Bitcoin focuses on value storage—it can’t handle tens of thousands of high-frequency transactions per second. Solana was designed for high performance—cheaper and faster—which makes it suitable for complex application scenarios like gaming and high-frequency trading. In the internet world, there are Google and Facebook; in the blockchain space, there are also a few core Layer 1 networks. Bitcoin is like gold, while Solana could be a digital highway.

10, Nasdaq Down 12%, Bitcoin Down 50%—Does That Make Sense?

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

Dan Morehead: I think it’s highly unreasonable. Stock valuations are at historical highs right now, and the risk premium is extremely low, while interest rates are still high—meaning stocks are already very expensive relative to bonds.

There are also signs of overheating in the AI sector—many AI company valuations are already far above their trend lines.

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

11, “I Can’t Find Anything That Could Derail This Process”

Host: How is your mindset different now than during the 2014 and 2018 bear markets?

Dan Morehead: Completely different. In the early days, I did have moments of cold sweats—worrying that this whole experiment could be wiped out by a single hack or regulatory crackdown. But after experiencing Mt. Gox’s collapse, multiple 85% drawdowns, and regulatory roundups, the industry didn’t die—it only got stronger. It has already reached escape velocity.

Host: Is there any event that would make you abandon the bullish view entirely?

Dan Morehead: A few years ago, I compiled a long list of risks, including custody security, hacks, and regulatory uncertainty. But looking back now, most of those risks have largely been addressed. No one can guarantee that nothing unexpected will happen tomorrow, but logically, I can’t find any factor that would completely derail this process. A globally networked, smartphone-based monetary system is an inevitable direction for human society. With 4 billion smartphone users worldwide, the financial inclusion brought by blockchain is far more important than sharing photos on social media.

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