Bitcoin prices run higher as dollar weakens

Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Dan Roberts discuss bitcoin prices and the overall crypto market with Dan Morehead, Pantera Capital CEO.

Video Transcript

BRIAN SOZZI: Bitcoin's recent surge has brought on a lot of new predictions about the future of cryptocurrencies. Here to break it down is the CEO of Pantera Capital, Dan Morehead, and Yahoo Finance Editor-at-Large Dan Roberts.

Dan Morehead, I will start with you. I really enjoy looking at your background. That is-- that's pretty cool. That's a Bitcoin white paper, you told us off camera. Where do you think the next move is? Or what do you think the next move in Bitcoin is?

DAN MOREHEAD: Yeah, we believe that all of the fundamentals are lining up right now. So the price is still 40% below its peak. There's trillions of dollars of paper money being printed, which is pushing up the price of all assets that aren't quantitatively-easable.

And then, actually, the blockchain applications are really starting to take off and work like a decentralized finance. So in hist-- historically, Bitcoin has tripled every year since nine years ago, on average. We think this year could be much stronger than that.

ALEXIS CHRISTOFOROUS: Is that because people are running to Bitcoin as a hedge, in much the same way they would be running to gold, Dan?

DAN MOREHEAD: It is. Gold's at a record high. So as you print more and more pieces of paper money, it-- it incentivizes people to buy things you can't quantitatively ease. So gold's going to go up. Bitcoin's going to go up. It is a hedge to paper currency being debased.

DAN ROBERTS: Dan, Dan Roberts here. I know you guys say that you've seen a lot of new institutional interest in investing in Bitcoin. We've heard the same from Grayscale and other firms. But what about from retail investors, just so-called regular people, especially because when we've talked about the market in the last few months, the sort of Robinhood effect has been so big for a lot of key stocks, that is, kind of stock market newbies getting in? What about attracting those people to investing in crypto?

DAN MOREHEAD: It's true. Crypto has these wild price swings. And as the price starts surging, we see interest go way up. And so the prices are up, as you said, about 60% for Bitcoin. Some alt coins or other types of blockchains are up 100% or 200% this year. And that brings massive new interest in.

DAN ROBERTS: And I know that you guys had or have still an ICO fund. And what's been interesting, you know, we covered closely the kind of ICO boom and bust, and as I understood it, the SEC and other agencies made pretty clear that they think most of these token offerings are securities offerings.

And yet now it seems like we're starting to see a new wave of tokens being created and offered, maybe using different terms. But where is that all headed? And are ICOs really OK and smart investments still?

DAN MOREHEAD: Yeah, there's kind of a perception that ICOs were invented in 2017. They kind of did their thing and went away. In fact, ICOs were invented in 2013. They just used to be rare. And that's basically where we're back to.

ICOs still happen, but they're rare. We have a fund that invests in pre-auction ICOs. And you know, instead of seeing 50 white papers a week like we were doing at the peak in 2017, we invest in one every quarter or two. So it's-- the market's still there. It's just much more selective.

BRIAN SOZZI: Dan, you put out a tweet that caught my attention. You noted stay long Bitcoin until schools reopen. Does that suggest the move higher in Bitcoin only has about two to three weeks left in it?

DAN MOREHEAD: Oh, as Reggie said, you know, the school opening thing is a really tricky thing for a economy. The Bureau of Labor statistics says 40% of American families have kids under 18 at home. It's very difficult for those people to go back to work fully if they're in the largest home schooling army the world's ever seen.

So we think that fiscal stimulus will-- will keep coming, at least until most kids are back into in-person schools or daycare, and that seems to be a long way away. And the stat that really blows my mind is in June, the United States printed more debt than we did in the first two centuries of our existence.

BRIAN SOZZI: And that's all bullish for Bitcoin.

DAN MOREHEAD: It is. You know, there's so many uncertainties in this pandemic. But one thing that seems almost assured is when you print trillions of dollars more pieces of paper money, it's going to drive up Bitcoin and other cryptocurrencies.

ALEXIS CHRISTOFOROUS: Are you seeing any kind of a demographic shift yet in who's interested in buying Bitcoin? Because I think, you know, it continues to be millennials hedge with Bitcoin. Older generations like to hedge with gold. Do you see that changing anytime soon?

DAN MOREHEAD: It is changing. And yes, the original wave was all younger people being excited about it. But you see-- you know, Paul Jones put 2% of Tudor management into Bitcoin, and he's obviously a, you know, famous investor that's been in the business for a long time.

And he said it reminded him of gold in the '70s. And I think that's a great way to say it. In the '70s, we had a ton of inflation. They were printing tons of paper money, and gold went up a ton. It's going to be similar here with Bitcoin.

DAN ROBERTS: Dan, what do you make of the prospects lately for Ethereum, which there was so much hype around how the Ethereum blockchain was going to be better for applications and a bigger deal than Bitcoin? Maybe that hasn't panned out so much. It seems, like, fair to call you a Bitcoin maximalist?

DAN MOREHEAD: No, no. I'm not a maximalist. There's a lot of people in this business that are almost religious about it. There's one true and only one heaven that-- for some people. We're investors. We're trying to make money.

So there was a point we were long 100% Bitcoin. There's been points we've had much more Ethereum than Bitcoin. So they're different use cases. And we do believe that over the next year the non-Bitcoin cryptocurrencies will outperform Bitcoin. It's happening so far this year.

Bitcoin's up about 60%, and our Digital Asset Fund's up 130%. So it's-- there are different things to invest in Bitcoins. The biggest is about 60% of the market. But the other 40% have a lot of interesting things.

And you know, it's like in the early '90s on the internet being a maximalist about one company. You know, there were 30 really interesting projects. So you should have the same mentality with crypto.

BRIAN SOZZI: All right, we'll leave it there. Let's thank the double Dans, Dan Morehead, CEO of Pantera Capital, and our very own Editor-at-large Dan Roberts. Thanks so much.