Pantera Capital founder and CEO Dan Morehead said cryptocurrency markets may be undervalued compared to AI stocks, which he described as overheated after a strong run.
Morehead described the divergence as one of the largest he has seen between the two sectors, speaking at an event in New York on Tuesday.
“It’s just my intuition that, although AI is very important, it will increase a lot in the long term, and it seems that at this point it is already quite valued,” he said.
By contrast, “cryptocurrencies… are incredibly cheap,” according to Morehead.
Pantera’s internal data supports that view. Morehead said an index of leading AI companies is “trading 33% above its four-year log trend,” while bitcoin has fallen far below its own historical trajectory. “It’s 43% below its trend,” he said, calling it “the biggest divergence we’ve seen in history.”
The gap comes as investor enthusiasm has shifted heavily toward AI, with large funding rounds and rising valuations in the public market. Meanwhile, cryptocurrencies have struggled to regain momentum despite broader adoption and regulatory progress in the US.
“Most institutions still don’t understand it. They don’t have any exposure yet,” Morehead said, adding that the limited participation leaves room for future demand. He noted that only a minority of large investors currently own digital assets, even as the asset class matures.
That dynamic contrasts with AI, where investors have moved quickly to value expected growth. For Morehead, the imbalance creates an opportunity for those willing to take a broader view.
He also pointed out the structural cycles in crypto markets. “The four-year cycle is real,” he said, referring to the bitcoin supply schedule. If past patterns hold, it suggested that the market could remain in a weaker phase in the near term, even if the long-term outlook remains positive.
Beyond relative valuations, Morehead linked the appeal of cryptocurrencies to broader macroeconomic trends. He described digital assets as a hedge against currency devaluation and noted that inflation and monetary expansion have pushed investors toward scarce assets. “In reality, all those things are not moving. It is a massive devaluation of paper money,” he said.
Morehead sees a convergence between AI and blockchain technologies. Pantera has invested in several projects at that intersection, and Morehead argued the two sectors are linked. “There’s really no world where AI is important and cryptocurrencies aren’t a part of it,” he said.
Pantera sees cryptocurrencies as a relative value trade for now. As capital continues to flow into AI, Morehead’s thesis is based on the idea that markets will eventually rebalance, drawing attention back to digital assets that he believes remain undervalued.
