After BTC halves, Pantera's founder says this is the must-not-miss entry point

Source: The Master Investor Podcast with Wilfred Frost, translated by: Baihu Blockchain

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

Highlights

• Most institutional investors still have a position of 0.0% in blockchain—literally zero.

• It wasn’t gold making new highs—it’s paper money hitting 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 been pushed back 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 the next decade.

• Bitcoin has already reached escape velocity, and I can’t find any factor that could derail this process.

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

“Still the most asymmetric trade in history”

Host: The last time you came, we dug into the macro logic of crypto. When you first bought Bitcoin, the price was surprisingly low—what was it?

Dan Morehead: 65 dollars.

Host: 65 dollars—compared with today’s price of roughly 66,000 dollars, that’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 remain convinced. Throughout my entire career, I’ve been looking for those asymmetric opportunities where the upside potential is far greater than the downside risk. Bitcoin—and the broader crypto space—has been the most asymmetric trade I’ve ever seen.

Early on, I would tell people: You could very easily lose all your principal, so don’t put in more money than you can afford to lose. But at the same time, you could earn returns of 5x, 10x, or even hundreds or thousands of times.

The reason I’m still bullish is that we’re still in the very early stage. Most institutional investors still have positions of 0.0% in blockchain and crypto—literally zero. As long as the downside risk is trivial compared with the vast scale of global financial assets, and the upside is to redefine the entire monetary system, this asymmetry won’t disappear.

Four-year cycle confirmed again

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’s been through multiple cycles, how do you interpret this drop?

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

When we met in October, we happened to be near the peak we predicted one to two years earlier. Based on models from the first three cycles, we expected Bitcoin to reach a local peak around August 2025. Even though at the time we hoped this time would turn out differently—perhaps new government policy could break the cycle—in hindsight, the cycle pattern once again realized itself. The market fell 50%. It sounds like a lot, but compared with earlier cycles, when the drawdowns were often 85%, this time is actually relatively mild. The market may still need about a year to build a base, consistent with past patterns.

Host: At the time, you didn’t come across as bearish. Do you think this cycle ultimately drops like before—down 75% to 80%?

Dan Morehead: That’s a key question. I didn’t predict it would fall that much at the time, because there were a lot of positive factors then. But the market has its own rhythm. What I want to point out is that in previous peak periods, the price had deviated far from the long-term logarithmic trend line, showing these crazy parabolic moves. For example, in 2013, in the four months before the peak, the price rose 10x. But this time, the price didn’t show that kind of extreme overheating—it just roughly returned to 2021 levels.

So I think the current price is roughly in the bottom-range. It may still take another six to eight months to build a base, but if you have a 4- to 5-year investment horizon, this is a very compelling position.

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

Dan Morehead: I’m not good at that sort of technical analysis. We never try to do very short-term timing trades. How we manage capital is more like venture capital—the perspective is 5 years, 10 years, even 20 years. From that standpoint, prices are already quite cheap right now.

Why is Bitcoin always the first one to get smashed?

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 off. Will this situation last forever?

Dan Morehead: That’s a very sharp observation. Think about it: if a major shock happens outside trading hours from Monday to Friday, you can’t sell stocks. And crypto is the only highly liquid market that reaches a scale of $2 trillion and is open 24 hours a day all year long.

When local geopolitical crises erupt, institutions want to reduce risk exposure immediately—and Bitcoin becomes the only asset they can liquidate in real time. That leads to it absorbing too much selling pressure in the short term. But note: while correlations spike during “flash crash” moments, in the long run, Bitcoin’s correlation with the S&P 500 is actually quite low—around 0.1 to 0.2. Over a multi-year time horizon, crypto moves independently to the upside, whereas traditional assets may just tread water.

Not a new high for gold—historic lows for paper money

Host: Let’s talk about gold. Over the past 12 months, gold is up 55%, while Bitcoin is basically flat. Does this shake the “digital gold” narrative for Bitcoin?

Dan Morehead: Gold is an interesting “old-school” asset. It periodically comes back into mainstream attention. Before 2025, gold ETFs actually saw net outflows for many consecutive years, while money poured into Bitcoin ETFs. But by 2025, people suddenly realized that the dollar is accelerating in value loss—and that urgency caused capital to rush back into gold.

But my way of thinking about this is a bit different: it wasn’t gold or real estate that made new highs—it was paper money making historic lows. As the printing press keeps running, the amount of paper money needed to buy a fixed quantity of assets must keep rising. The term pound initially referred to a pound of pure silver—now you have to shell out several hundred paper bills to buy the same weight of silver. Governments can print unlimited money—that’s the core of the value-loss trade.

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

Dan Morehead: Absolutely. The Federal Reserve defines “price stability” as 2% value loss per year, which in itself is absurd. Stability should be zero. Even if it’s only 2% value loss per year, a person’s purchasing power over a lifetime shrinks by nearly 90%. (Editor’s note: using compound interest, with a 2% annual value-loss rate, purchasing power declines by about 80% after 80 years.) I think people are waking up—realizing you need to hold a fixed quantity of hard assets, whether that’s stocks, gold, or crypto.

This value-loss trade also has clear generational characteristics. Large-scale money printing boosts asset prices, which benefits older generations who already hold real estate and stocks, while squeezing younger people’s upward mobility. The average age of first-time homebuyers in the U.S. has already been pushed back from 28 to 40. Since it’s impossible to accumulate wealth through traditional paths, it’s a very rational choice for the younger generation to turn to crypto. If you look at the wage growth curve and the home price growth curve since 1990, you’ll see that the gap has become absurdly wide.

Separation of money 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 a “separation of money from the nation.” In ancient times, money was gold, so it was naturally independent from the government. Later, governments monopolized the right to print money—but it turns out they haven’t managed it very well.

Over the next decade, people will gradually realize that money doesn’t need a nation to back it. Geopolitical conflict makes 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’re worried your assets could be sanctioned or frozen, you’ll want an asset that isn’t controlled by any single country. China once invested large amounts of foreign exchange reserves in U.S. Treasuries, and under the current international landscape, the risk is getting higher and higher. As an asset independent of the banking system and the sanctions regime, Bitcoin’s value actually stands out even more during conflicts.

“Smart money” somehow enters last

Host: Right now, how many people actually hold crypto? Are major institutions taking big positions globally?

Dan Morehead: Still very few. Although hundreds of millions of people worldwide hold crypto, most have small “for-fun” positions. But I think within ten years, because of the widespread use of smartphones (4 billion users globally), most people will use crypto. Transfers across borders are fast, almost free, and don’t require anyone’s permission.

This could be the first trade in history where “smart money” enters last. In all the investment opportunities I’ve seen over the past 40 years, it’s usually been Wall Street that eats first, and retail investors that end up holding the bag last. But this time is completely the opposite: individual investors are walking out in front. I’ve shared stages with many alternative-investment big shots managing hundreds of billions of dollars, and many of them know basically nothing about Bitcoin.

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

Policy shifts from hostile to a tailwind

Host: The new government’s shift in stance is an important variable for this cycle. How do you assess the current policy environment?

Dan Morehead: This is a massive tailwind. The prior administration took a hostile stance toward the blockchain industry, going after Coinbase and going after Ripple. But now the government is willing to build this industry. While lawmakers always move at a pace that makes people impatient, honestly, the fact that the U.S. Congress can spend time discussing topics like “the market structure of stablecoins” in itself indicates the industry’s status has fundamentally changed.

As for stablecoins, this is a revolution that’s unfolding in phases. Stablecoins may not yet fully pay interest across the board, but that’s just a matter of time. Stablecoins are already nibbling away at the market for bank deposits. Stablecoin market size 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 approximately $300–320 billion, source: DefiLlama, CoinDesk, and other data platforms.) Over the next ten years, stablecoins are extremely likely to take half of bank deposits, because they’re available 24/7 on your phone—far better than traditional banking experience.

Will a strategic Bitcoin reserve arrive?

Host: You’re also watching digital-asset treasury companies, like MicroStrategy. Do you think the government will create a strategic Bitcoin reserve in the future?

Dan Morehead: I think this is very likely. The U.S. already has a certain scale of digital asset reserves, mostly from law-enforcement seizures and forfeitures. And now they’re not selling those assets anymore—maybe they’ll even start accumulating. Countries that ally with the U.S. may follow for strategic reasons, and countries that oppose the U.S. may buy for defensive purposes. This requires time to be pushed through the political machine, but the trend is irreversible.

Why Solana?

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

Dan Morehead: We’ve held Bitcoin long term, but Bitcoin focuses on value storage—it can’t handle high-frequency transactions running at tens of thousands per second. Solana’s design goal is high performance—more cost-effective and faster, well-suited for complex application scenarios like gaming and high-frequency trading. The internet has a few core players like Google and Facebook; the blockchain space also has several core Layer 1 networks. Bitcoin is like gold, and Solana could be the digital highway.

Nasdaq down 12%, Bitcoin down 50%—does that make sense?

Host: The Nasdaq has fallen 12.5% from its high, while Bitcoin is down 50%. Does this mismatch make sense?

Dan Morehead: I think it makes very little sense. Stock valuations are still at historic highs, and the risk premium is extremely low—while interest rates are still high, which means stocks are very expensive relative to bonds. The AI space has also shown signs of overheating, and many AI companies’ valuations are already far above the trend line.

By contrast, crypto is 50% below the long-term trend line. From an asset allocation perspective, crypto is currently in a highly attractive oversold range. Even if the Nasdaq continues to fall, I believe crypto will perform better over a two-year span.

“I can’t find any factor that would derail this process”

Host: How is your mindset different now compared to when you were in the 2014 and 2018 bear markets?

Dan Morehead: Completely different. In the early days, I really did have moments where I was sweating with anxiety—worried that this whole experiment could be completely destroyed by a single hack or by regulatory crackdown. But after experiencing Mt. Gox’s collapse, multiple 85% drawdowns, and regulators repeatedly going after the industry, the industry not only didn’t die—it’s gotten stronger and stronger. It has already reached escape velocity.

Host: Is there any event that could make you give up being bullish entirely?

Dan Morehead: A few years ago I made a very long list of risks, including custody security, hacking attacks, and regulatory uncertainty. But when I look back now, most of those risks have already been resolved. No one can guarantee that something unexpected won’t happen tomorrow, but logically, I can’t find any factor that would completely derail this process. A globalized monetary system built on smartphones is the inevitable direction for human society. With 4 billion smartphone users worldwide, the financial inclusion brought by blockchain matters far more than sharing photos on social media.