Pantera Capital founder and CEO Dan Morehead argues the core driver of this cycle remains the same “one trade” uniting macro and crypto: fiat debasement pushing capital into scarce, higher-beta assets. In a wide-ranging conversation with Real Vision’s Raoul Pal, the pair frame the current rally—and what comes next—through the lens of policy error, structural deficits, sticky inflation, and the slow-rolling migration of institutional and sovereign portfolios into digital assets. The Debasement Trade Powers The Crypto Bull Run Morehead’s starting point is blunt: “We have full employment. Inflation is debasing our assets by 3% a year… and they’re cutting rates. Like, it’s crazy.” He calls 2020–2021 “a policy error”—“there was a time where inflation was 8%, and the Fed Funds rate was zero”—and says easing into today’s backdrop “when everything’s booming” undermines the monetary check on “record fiscal deficits.” The consequence, he argues, is that price levels across real assets look high not because they are rallying independently, but because the denominator is falling: “It’s the price of paper money that’s plummeting.” Related Reading: Is The Crypto Bull Run Over? Lekker Capital CIO Warns ‘Don’t Miss The Forest’ Pal extends the frame to a single macro factor. “We use [Global Macro Investor’s] total global liquidity index as our benchmark for debasement. The Nasdaq, since 2012, has a 97.5% correlation, and Bitcoin is about 90%.” In his words, “None of it matters. It’s all one trade.” The implication is a regime where liquidity and debasement overwhelm the usual cross-asset nuance: “It’s the greatest macro trade of all time.” That regime, in Morehead’s view, also explains why adoption keeps broadening. The pair note how the “debasement trade” has migrated from crypto-native circles into bank research. “JP Morgan’s talking about it. And I got an email from Goldman today, the debasement trade,” Morehead says. “I’ve been talking about it for 12 years.” Pal adds that even large banks “openly” talk about currency debasement now, while clients are being offered wider access to crypto exposure. The wedge, they contend, remains institutional under-allocation. “How can you have a bubble nobody owns?” Morehead asks. “The median institutional investor’s exposure to crypto and blockchain ventures is literally 0.0.” Asked where steady-state allocation could land, he points to “8 or 10” percent over time, echoing Pal’s observation that many family offices that start at 2% “end up being 20% really fast” as price action mechanically increases weightings and conviction follows. Morehead also sees policy politics and geopolitics accelerating adoption. He argues the US election reset a regulatory headwind—“we went from… aggressively negative… to being extremely positive”—unlocking public pensions and sovereign funds that “got scared away in 2022” after the FTX/Luna/Celsius cascade and high-profile enforcement cases. He goes further, sketching a sovereign “arms race” for reserve Bitcoin: US holdings via seizures, “roughly the same” in China, and GCC states “aggressively getting into the blockchain space,” with room for acquisitions “tiny compared to balance sheets.” In his phrasing, if multiple blocs each target million-coin stockpiles, supply dynamics could “squeeze up like a watermelon seed.” Why This Crypto Bull Run Extends Into 2026 If liquidity and adoption anchor the bull case, both still respect crypto’s cyclicality. Morehead has modeled four-year dynamics around halvings and says Pantera’s prior cycle targets hit with eerie precision: “We forecast… Bitcoin would hit $118,542 on August 11th, 2025. And it did… one day [early].” He also notes past peaks coincided with celebratory “events”—the 2017 CME futures listing and 2021 Coinbase direct listing—followed by ~85% drawdowns. Yet he argues “this time” may be meaningfully extended by the policy and allocation backdrop: “The regulatory changes in the US, I think just trump everything… I think the next six to 12 months are still a big rally.” Pal, while acknowledging the internet’s penchant for hanging forecasters, concurs: “I think it’s going to extend.” Related Reading: Russia’s New Crypto Framework Could Redefine Global Trade Amid Sanctions Pressure The social dimension of adoption runs through the conversation. Debasement’s distributional effects have made housing and rents the stickiest CPI components—“35% of [core CPI] is shelter,” Morehead says—pushing younger cohorts toward hard assets. Meanwhile, the “virality rate of crypto is like 95%,” he claims: “you get a smart person… to think about it for an hour, they’re all like, ‘Oh yeah, I should buy some crypto.’” Evangelists matter, too: “Michael Saylor has done a great job. He has Messianic following… Tom Lee [on ETH]… We’re gonna endeavor to do that on Solana.” Visibility through ETFs, DATs, and media segments pulls newcomers into the funnel, where small initial slices tend to scale. As Pal puts it, investors who lack exposure feel “like you’re short the upside calls.” I love it when technology, crypto, and macro come together in someone’s journey… and there’s no one better than my dear friend @dan_pantera, an OG in the space! Please enjoy pic.twitter.com/ShZAd2tB3u — Raoul Pal (@RaoulGMI) October 23, 2025 For all the optimism, the macro warning lights stay on in the background: structural US deficits “literally in the best of times,” a monetary-fiscal loop trapped between refinancing needs and price stability, and a demographic drag on productivity that leaves AI-driven gains still ahead of the curve. “Debasing your fiat currency against everybody else’s fiat currency is a race to the bottom,” Morehead cautions. In that world, gold and crypto function as life rafts: “That’s why everything’s at record prices… except for paper money.” Both men close by zooming out. The internet is “53 years old and they’re still doing cool internet companies,” Morehead says; Bitcoin turning 17 means the asset class remains a teenager. The majority of institutions “still have 0.0” exposure. If the “one trade” persists—liquidity up, fiat down, adoption rising—then the path of least resistance, in their telling, still points higher. Or as Morehead compresses the thesis into a single line: “If you hold crypto for four or five years, I think it’s like 90% that you make money… It is that simple.” At press time, the total crypto market cap stood at $3.7 trillion. Featured image created with DALL.E, chart from TradingView.com
Pantera Capital founder Dan Morehead believes a geopolitical shift in reserve management will push adversaries of the United States into Bitcoin at massive scale, calling it “inevitable” that China and Russia eventually hold “trillions of dollars” worth of the asset. Speaking on Blockworks’ Empire podcast released this week, the billionaire framed the prediction as part of a longer-term rotation in global reserve assets and a response to sanction risk embedded in dollar-denominated holdings. “I think it’ll take a decade or two,” Morehead said, adding that the first movers will likely include US-aligned Gulf states before “the big one” arrives with countries “antagonistic to the United States, like China or Russia.” Why Russia And China Will Adopt Bitcoin Morehead anchored his argument in the historical cadence of reserve transitions and the vulnerability of holding claims on a rival’s financial system. “You gotta remember, the reserve currency’s changed every 80 or 100 years… no one’s ever really lasted for more than, let’s call it 100, 110 years,” he said. While calling it “inconceivable that the dollar will be supplanted” overnight, he warned that countries with large US Treasury positions face concentrated political risk. Citing China’s portfolio, he argued: “It’s really pretty crazy to have your entire country’s life savings in an asset that your potential adversary could literally just cancel.” In his view, that calculus makes it “inevitable” that such countries “will have started to save in Bitcoin and other cryptocurrencies” within the next decade. Related Reading: Bitcoin Dip-Buy Calls Spike: Why This Could Actually Be Bearish The provocation lands amid measurable changes in how major economies hold US debt. Official Treasury data for July 2025 show China’s reported Treasury holdings at $730.7 billion, the lowest since 2008 and down markedly over the past decade, a decline often read as gradual diversification of reserves rather than abrupt abandonment. JUST IN: BILLIONAIRE DAN MOREHEAD JUST SAID IT’S “INEVITABLE” CHINA AND RUSSIA WILL HOLD TRILLIONS OF DOLLARS IN #BITCOIN NATION STATE GAME THEORY. IT’S HERE ???? pic.twitter.com/tOQO9tHYNi — The Bitcoin Historian (@pete_rizzo_) September 23, 2025 Japan remains the largest holder at roughly $1.15 trillion, with the United Kingdom near $900 billion. The broader pool of foreign-held Treasuries nonetheless hit a record in July. These figures illustrate that while the dollar system remains deep and liquid, China’s share is slipping at the margin—the exact dynamic Morehead argues could accelerate alternative reserve strategies over time. Morehead’s timeline also intersects with a flurry of policy proposals that, if enacted, would normalize sovereign Bitcoin exposure. In March, US President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve and a national digital asset stockpile. Wyoming legislators separately advanced a bill to permit limited Bitcoin investments—capped at 3%—within certain state funds, an incremental step toward institutional reserve management in digital assets at the state level. Related Reading: Bitcoin Falls Below $113,000, But This Indicator Says It’s Time To Buy Outside the US, Gulf governments are already experimenting at the edges of sovereign crypto exposure—another plank in Morehead’s thesis. The United Arab Emirates’ has launched state-backed mining initiatives and disclosures suggesting several thousand BTC accumulated on the balance sheet via those operations. Skeptics will note that moving “trillions” of dollars into Bitcoin would require not only policy shifts but also market structure capable of absorbing sustained sovereign demand without disorderly volatility. Liquidity depth has improved with US spot ETF adoption and growing derivatives markets, yet Bitcoin’s free float, custody frameworks, and cross-border payment rails still face periodic stress. Morehead, however, situates the thesis in a long arc rather than a short-term trade. “I don’t think it’s gonna happen overnight,” he said, emphasizing a horizon of “a decade or two” and a phased path in which US-aligned adopters pave the way for politically non-aligned states that prize censorship resistance and sanction insulation. For China and Russia specifically, the impetus would be as much strategic as financial. China’s willingness to chip away at Treasuries aligns with its broader push to diversify reserves into gold and other assets, while Russia’s post-2014 and 2022 sanctions experience has already driven a dramatic reconfiguration of its reserve composition. At press time, Bitcoin traded at $112,639. Featured image created with DALL.E, chart from TradingView.com
The CEO and founder of the crypto VC firm advised investing in a wide spectrum of tokens and venture equity.
Dan Morehead, founder and managing partner of Pantera Capital Management, has reiterated his bullish stance on Bitcoin, predicting that the pioneering cryptocurrency could eventually command a $15 trillion market cap. Morehead’s comments came during a recent interview on CNBC’s “Squawk Box,” where he also highlighted Pantera’s original Bitcoin fund surpassing a 1,000x return since its […]