Dan Morehead, the founder and CEO of Pantera Capital, a San Francisco-based institutional investment firm focused on providing clients exposure to bitcoin (BTC) and other cryptoassets, has said that he is no longer worried about whether blockchain technology is here to stay - as he was during the 2014-2015 crypto bear market.
Morehead’s recent comments about the current state of the crypto market came during an interview with former Forbes Editor Laura Shin, who has now launched her own “Unchained” podcast. Explaining why he thinks the nascent crypto and blockchain industry will survive what’s now officially the longest digital asset bear market, Morehead remarked:
I think the underlying fundamentals are much much stronger than they were in the 2014-15 crypto winter.
"Thinking Ahead" 5 To 10 Years
Morehead, whose firm began to “exclusively focus on Bitcoin” and other cryptoassets since March 2014, revealed that Pantera Capital takes a long view when making investment decisions. Since launch, the company has invested in various projects based on a 5-10 year outlook, Morehead stated. Describing his company’s market cycle agnostic approach, Morehead said:
We are always trying to think ahead 5 to 10 years in our investing and looking at the positions that would do well over a long period of time. We’re not trying to get wrapped up in the cycles of the price action.
Expressing views similar to those held by billionaire crypto investor Michael Novogratz, Morehead revealed he is convinced institutional investors will make substantial investments in the crypto market. However, he conceded that the sharp decline in cryptocurrency prices was holding back many institutional players from entering the crypto industry.
Custodial Solutions Are Necessary
The former global head of foreign exchange (FX) options at Deutsche bank in London believes the crypto industry has matured to the point where significant amounts of institutional capital will begin moving into the market. Commenting on what institutional clients expect, Morehead explained:
Institutional investors really want to have a custodian that’s well-known and regulated. We really haven’t had that in the past.
People have been talking for years about the impending institutional wave of money coming into the crypto market. I think we now have the required conditions for that to happen.
Notably, Morehead also thinks most institutional investors will not start betting on cryptocurrencies until the market recovers. According to the Pantera Capital founder, institutions are generally risk-averse which may seem to go against investment strategy of “buy low and sell high”, Morehead said.
In 2013, there was limited interested in Pantera Capital’s crypto-related investments, Morehead revealed. However, when the bitcoin price increased from around $65 to over $1,000, there were many more clients interested in investing in cryptoassets, Morehead recalls.