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 compilation: Baihuai Blockchain

In this interview, Wilfred Frost and Dan Morehead, the founder of Pantera Capital, held their second in-depth conversation. They discussed the cycle positioning after Bitcoin pulled back 50% 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 summary

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

· It’s not that gold made new highs—it’s that paper money hit historic 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 separates 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 any factors that could derail this process.

· If you don’t have any blockchain exposure, to a certain extent you’re already shorting this trend.

01, “Still the Most Asymmetric Trade in History”

Host: When you came last time, we dug into the macro logic of crypto. What was the price when you first bought Bitcoin—shockingly low as it was?

**Dan Morehead: **$65.

Host: $65—compared with today’s price of about 66,000, that’s two different worlds. In that episode, you described Bitcoin as “the most asymmetric trade in history.” Do you still hold that view today?

**Dan Morehead: **Yes, I’m still convinced of that. Throughout my entire career, I’ve been looking for those asymmetric opportunities where upside potential far outweighs downside risk. Bitcoin—and the broader crypto space—is the most strongly asymmetric trade 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 up to 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 crypto are still 0.0%. Literally zero. As long as the downside risk is insignificant compared with 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 has held true again

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

**Dan Morehead: **Anything that tries to change the world will come with a lot of hype and volatility. At the high point, optimism runs wild; at the low point, 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 patterned—even predictable.

When we met in October, we happened to be near the peak we predicted about two or three years ago. Based on models from the first three cycles, we expected Bitcoin to reach a stage peak around August 2025. Although we hoped this time would produce different results—for example, that new government policies could break the cycle—looking back, the cycle pattern has once again fulfilled itself. The market has fallen 50%. It sounds like a lot, but compared with the 85% drawdowns in prior cycles, this one is actually much more moderate. The market may still need about another year to build a base, which is consistent with past patterns.

Host: At the time, you didn’t show bearishness. Do you think this cycle will ultimately fall by 75% to 80% like before?

**Dan Morehead: **That’s a key question. I didn’t expect it to fall that much back then, because there were many positive factors at the time. But the market has its own rhythm. What I want to point out is that in previous peak periods, prices deviated far from the long-term logarithmic trend line and showed a crazy parabolic trajectory. For example, in 2013, in the four months before the peak, the price jumped 10x. And this time, prices didn’t show that kind of extreme overheating—it only broadly returned to the level of 2021.

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

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

**Dan Morehead: **I’m not good with that kind of technical analysis. We never try to do ultra-short-term timing trades. How we manage capital is more like venture capital—our perspective is 5 years, 10 years, even 20 years. From that angle, prices are already quite cheap now.

03、Why is Bitcoin always the first one to get smashed?

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

**Dan Morehead: **This is a very sharp observation. Think about it: if a major shock happens outside Monday-to-Friday trading hours, you can’t sell stocks. But crypto is the only highly liquid market of a scale of $2 trillion, open 24 hours a day year-round—globally.

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. That causes it to absorb too much selling pressure in the short term. But note that although correlation spikes during “flash crash” moments, over the long term Bitcoin’s correlation with the S&P 500 is actually quite low—around 0.1 to 0.2. Over a multi-year horizon, crypto moves independently upward, while traditional assets may just tread water.

04、It’s not that gold hit new highs—it’s that paper money hit historic 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 periodically returns into mass awareness. Before 2025, gold ETFs were actually experiencing net outflows for consecutive years, and the money was flowing into Bitcoin ETFs instead. But in 2025, people suddenly realized the dollar is accelerating in value decline—this urgency made capital rush back into gold.

But my way of thinking about this is a bit different: it’s not gold or real estate that set new highs; it’s paper money that set historic lows. As the printing press keeps running, the number of paper dollars needed to buy a fixed quantity of assets must keep rising. The word pound initially meant one pound of pure silver; now you need several hundred bills to buy the same weight of silver. Governments can print money infinitely—that’s the core of the value-debasement trade.

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

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

This value-debasement trade also has a clear generational characteristic. Massive money printing inflates asset prices, which benefits older generations who already hold real estate and stocks, while squeezing young people’s upward opportunities. The average age of first-time U.S. homebuyers has shifted from 28 to 40. Since wealth can’t be accumulated through traditional pathways, 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 find that this gap is already wildly out of proportion.

05、Money separating 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 “money separating from the nation.” In ancient times, money was gold—it was naturally independent of the government. Later, governments monopolized the power to print money, but it turned out they didn’t manage it well.

Over the next decade, people will gradually realize that money doesn’t need a national endorsement. Geopolitical conflicts make this trend even clearer— the world is fragmenting into blocs. If you’re a country that doesn’t belong to the U.S. bloc, or you worry your assets could be sanctioned or frozen, you’ll want an asset that isn’t controlled by any single country. China once put a large share of its foreign exchange reserves into U.S. Treasuries; under the current international landscape, the risk is getting higher and higher. Bitcoin, as an asset independent from the banking system and the sanctions regime, has its value stand out even more amid conflicts.

06、“Smart money” ends up entering last

Host: Right now, how many people truly hold crypto? Do truly big institutional positions exist globally?

**Dan Morehead: **Still very few. Although there are three to four hundred million people worldwide who hold crypto, most of them are “for fun” small positions. But I believe that within ten years, due to the widespread adoption of smartphones (4 billion users globally), most people will use crypto. Cross-border transfers are fast and almost free, and they don’t require permission from anyone.

This could be the first trade in history where “smart money” is the last to enter. In all the investment opportunities I’ve seen over the past 40 years, it’s usually Wall Street that gets to eat first, while retail investors are last in line to take the bag. This time, it’s completely reversed: individual investors are walking in first. I’ve shared stages with many alternative investment heavyweights who manage thousands of billions of dollars, and many of them don’t understand Bitcoin at all.

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

07、Policy shifts from hostile to tailwind

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

**Dan Morehead: **This is 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. While the pace of legislative progress always makes people impatient, honestly, the fact that the U.S. Congress can spend time discussing topics like “stablecoin market structure” itself indicates that the industry’s status has fundamentally changed.

Regarding stablecoins, this is a revolution that’s being rolled out in phases. Stablecoins may not yet fully pay interest, but that’s just a matter of time. Stablecoins are eroding the market for bank deposits. Stablecoin supply 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, sourced from multiple data platforms such as DefiLlama and CoinDesk.) Over the next decade, stablecoins are very likely to take half of bank deposits, because they’re available 24 hours a day on your phone and the user experience is far better than traditional banks.

08、Will strategic Bitcoin reserves come?

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

**Dan Morehead: **I think it’s extremely likely. The U.S. already has some scale of digital asset reserves, most of which come from enforcement seizures and forfeitures. And now they’re no longer selling these assets—they might even start buying. Countries allied with the U.S. would follow suit for strategic reasons, while countries opposing the U.S. would buy for defensive purposes. This will take time to push through the political machine, but the trend is irreversible.

09、Why Solana?

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

**Dan Morehead: **We hold Bitcoin long term, but Bitcoin focuses on value storage—it can’t handle high-frequency transactions on the scale of tens of thousands per second. Solana was designed for high performance—more affordable, faster—suited for complex application scenarios like games and high-frequency trading. Just like the internet has Google and Facebook, the blockchain space also has several core Layer 1s. Bitcoin is like gold, while Solana might be a digital highway.

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

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

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

There are also signs of overheating in the AI space, and many AI company valuations have already gone far beyond trend lines.

By contrast, crypto is 50% below its long-term trend line. From an asset allocation perspective, crypto is currently in a highly attractive oversold range. Even if Nasdaq continues to fall, 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 from when you were in the bear markets of 2014 and 2018?

**Dan Morehead: **Completely different. In the early days, I really did have moments where I was sweating, worried that this whole experiment would be completely wiped out by a single hack or regulatory crackdown. But after going through Mt. Gox’s collapse, multiple 85% drawdowns, and regulatory crackdowns one after another, the industry didn’t fall apart—if anything, it kept getting stronger. It has already reached escape velocity.

Host: Is there any event that would make you completely give up being bullish?

**Dan Morehead: **A few years ago, I drew up a very long list of risks, including custody security, hacks, and regulatory uncertainty. But looking back now, most of these risks have already been resolved. No one can guarantee that something unexpected won’t happen tomorrow, but logically, I can’t find any factors that could completely derail this process. A globally networked monetary system based on smartphones is the inevitable direction for human society. With 4 billion smartphone users worldwide, the financial inclusion enabled by blockchain is far more important than sharing photos on social media.

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