Pantera Capital founder and CEO Dan Morehead said cryptocurrency markets may be undervalued compared to artificial intelligence stocks, which he described as overheated after a sharp rally.
Morehead described the divergence as one of the biggest he’s seen between the two sectors, speaking at an event in New York on Tuesday.
“It’s just my hunch that while AI is very important, it’s going to increase significantly in the long term and seems to have a pretty high price tag right now,” he said.
In contrast, “crypto…is incredibly cheap,” according to Morehead.
Pantera’s internal data supports this view. Morehead said an index of leading AI companies is “trading 33% off its logarithmic trend over the past four years,” while Bitcoin fell well below its own historical trajectory. “It’s 43% cheaper than its trend,” he said, calling it “the biggest divergence we’ve seen in history.”
The gap comes as investor enthusiasm has shifted sharply toward AI, with significant fundraising and rising valuations in public markets. Crypto, meanwhile, has struggled to regain momentum despite wider adoption and regulatory progress in the United States.
“The majority of institutions still don’t understand. They still have no exposure,” Morehead said, adding that limited participation leaves room for future demand. Only a minority of large investors currently hold digital assets, he noted, even as the asset class matures.
This dynamic contrasts with that of AI, where investors quickly integrated the expected growth. For Morehead, the imbalance creates an opportunity for those who want to take a longer-term view.
He also highlighted the structural cycles of crypto markets. “The four-year cycle is real,” he said, referring to Bitcoin’s supply timeline. If past trends continue, it suggests that the market could remain in a weaker phase in the short term, although the long-term outlook remains positive.
Beyond relative valuations, Morehead linked crypto’s appeal to broader macroeconomic trends. He described digital assets as a hedge against currency depreciation, noting that inflation and monetary expansion have pushed investors toward scarce assets. “In fact, all these things are not moving. It’s a massive devaluation of paper money,” he said.
Morehead sees a convergence between AI and blockchain technologies. Pantera has invested in several projects at this intersection, and Morehead argued that the two sectors are linked. “There really isn’t a world where AI is important without cryptography being a part of it,” he said.
Pantera views crypto as a relative value trade at the moment. As capital continues to flow into AI, Morehead’s thesis hinges on the idea that markets will eventually rebalance, drawing attention back to digital assets that remain, in his view, undervalued.
