Forget Nvidia Inc. (NASDAQ:NVDA) or Microsoft (NASDAQ:MSFT), cryptocurrency may be the best way to ride the AI boom, according to Pantera Capital founder and CEO Dan Morehead.
Speaking during Alchemy’s CoBuild conference in New York on Tuesday, the OG investor in cryptocurrency, who first purchased bitcoin in 2013 when it was trading at $65, said AI and blockchain have been connected since the start, but AI is “fully priced” while cryptocurrency isn’t.
AI Is ‘Fully Valued’ Bitcoin Isn’t
“AI is very fully valued, maybe over valued and crypto is incredibly cheap relative to its value,” Morehead said. “As an investor you are always trying to time things.” Cryptocurrency “seems like a good investment today, especially (compared) to AI,” he said.
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Morehead pointed to a basket of 10 leading public and private AI companies tracked by Pantera. He said that index is trading about 33% above its four-year trend line. Meanwhile bitcoin is trading as much as 43% below its four-year trend, according to Morehead.
Morehead said he talks to a lot of institutional investors who want to invest in AI companies but are finding it difficult to “pull the trigger” because valuations are so high. While Morehead said AI is “very important” and is going to go up “big time over the long haul” finding an entry point right now is proving difficult.
That’s not to say cryptocurrency is having an easy time of it, these days. Bitcoin has been in a bear market since November and is trading 40% below its record high hit in October, despite optimism that favorable U.S. regulations and new use cases would lead to a surge in prices, according to Bitcoin Magazine. AI, on the other hand, continues to garner interest from both public and private investors.
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AI Agents Will Need Cryptocurrency
The way Morehead sees it, as AI becomes more ubiquitous AI agents will need digitally native ways to transact and will use blockchain-based payment systems instead of traditional banking. “AI agents aren’t going to walk down the street to a bank to open a bank account,” he said.
Morehead, who said he is “mega bullish” on bitcoin over the long term, thinks it will remain in a bear market until January. “If you can size your trade and hold for a venture style period you will probably do really well,” said Morehead. The investor hasn’t always been right with his bitcoin calls. In September he told MarketWatch that bitcoin would trade above $230,000. Bitcoin was most recently trading around $76,500.
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As enthusiasm around AI continues to drive significant capital into large-cap tech, some investors are beginning to question whether much of that growth is already reflected in current valuations. At the same time, crypto advocates argue that digital assets may still offer relative upside when compared to more crowded AI trades, creating a widening …
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