Phase II of the Bull Market | Dan Morehead

This is the trade of a generation. Bitcoin and cryptocurrencies have produced returns that are just— you can't get anywhere else. No other asset performs like that. And so I think that is kind of forcing people to make a decision and forcing people to get invested.

This episode is brought to you by Blockdaemon. You'll hear more about them later in today's episode. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice, or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.

All right, everyone, welcome back to Empire. Very excited about this one. Uh, we have Dan Morehead, who is the founder of Pantera. Pantera is a fund that's been around since 2003, correct me if I'm wrong, got into Bitcoin in 2013. I can share some ridiculous stats about the fund in a little bit. But Dan, welcome to the show, man.

Thank you. Thanks for having me.

I was researching this. I have a picture for you. I found your Princeton rowing.

Oh, that's awesome.

That is awesome.

Is this—

I was curious, you know, one thing. So we have actually Mike Novogratz is coming on the podcast next week. And so I was doing some research on Mike and found the Princeton connection and Joe. And actually, I want to start with Princeton. There is a class from Princeton, I think. Are you 1986?

'87.

'87. 1986, 1987. It's you, Pete Brigger, Novogratz, Joe Lubin, Gavin Andreessen, I think was the year after you made—

No, he's our same year.

He's your year. What made— actually, board member of Blockworks, Tad Smith, I think was '86 or '87. What made that class so special? And were you guys all friends with each other? Like, what was the— what was going on with Princeton class of '86 and '87?

Yeah. So Peter Berger, Mike Novogratz, Joe Lewin, and I were friends in college. And then out of college, I was a trader at Goldman Sachs. Pete and I worked together. And then a couple of years later, Mike joined Goldman Sachs.

You guys were all just buddies on the same hall or something?

Yeah. So we were just, you know, we knew each other through sports in college. And then we were on the same trading floor in the '80s. And then I moved to Tokyo in 1990 and I was driving down the street with my wife, who's also from Princeton, uh, and we saw a guy sitting on moving in wearing a Princeton sweatshirt, and we turn around, it was Mike Novogratz. He's moving in next door to us in Tokyo. Uh, so we've just kind of had very parallel lives. Um, Fortress also was our largest day one investor in 2004 when we launched the first fund, and then the first investors, and they were part of the GP for a while in the blockchain era of Pantera.

Nice, nice. Who, um, I've heard many different stories that you, you told Mike to buy his first Bitcoin, or he told you, or then someone got Lubin involved for their first ETH? Like, what was the original story there?

Yeah, so I, I saw Pete Berger, um, and he said, hey, you know, want to come in and talk about Bitcoin? And my, uh, brother John had introduced me to Bitcoin in 2011, back when Gavin Andresen had a thing called the Bitcoin Faucet, and they were giving away free Bitcoins. Like, it was so unknown and un— you know, like, so few people knew about it that all you had to do is just log into Bitcoin Faucet and get free Bitcoins. I have a libertarian streak, so when I read about it, I was like, "Oh, this is great. I hope it happens." But I didn't actually do anything. Then I went in for a coffee with Pete and Mike and a couple of their colleagues. The coffee lasted like 5 hours because it was just so mind-blowing. I was like, "This is the coolest thing ever." They offered me space in their office to start working on it. They finally kicked me out about 8 years later. We stayed in Fortress's office for ages. Literally since that day, that was like March 12th, 2013. I haven't thought about any other investing. It's just so captivating.

That was March of 2013.

Yeah.

So I found an email from July of 2013 that you wrote, and I'll just read it for folks. It says, the forecasted Bitcoin washout happened very quickly. Bitcoins are now trading at $65, exactly half the price they were trading at our first meeting. I think we should buy aggressively now. I'm going to buy 30,000 Bitcoin this weekend with personal money. The fund can have this purchase or not, as others wish. I just want to get involved.

Dan.

Crazy. Tell me about that time period.

Yeah. And literally everybody thought I was crazy. Nobody. I sent that and nobody joined.

Were you already a little crazy though?

Were people like, oh, that's Dan being Dan?

No, no. I've had a normal career, hedge funds, Tiger Management, all that stuff. Very kind of stable and predictable. And so, just kind of going all in on some little sci-fi tech project was not something people were, um, uh, ready for, you know, thought was normal. I sent that note, crickets chirping. Nobody wanted to invest. And so, um, I just started buying, uh, Bitcoins. The market was so illiquid back then. It was tiny, uh, very, very small. And I originally were going to do this whole thing as a Fortress-branded product, uh, and their board voted it down at the kind of the last minute. So we didn't have—

this was gonna be a Fortress-branded Bitcoin fund?

Yeah.

So, oh, interesting.

All this stuff we're doing now was originally conceptually going to be a Fortune 500 thing. So, uh, so at the last minute we had to make sure we had our own account set up and our own funds and all that in our own name because we'd done a lot of work to be ready. Uh, and so at the last second I sent, um, money to two different exchanges, uh, and tried to start buying Bitcoins then. And the funny thing is I sent it to, um, uh, a funky little exchange in Ljubljana, Slovenia, Bitstamp, and then, uh, to, uh tiny startup that had one employee called Coinbase. And, uh, when I went in to, to do the purchase, a pop-up came up and said, your limit's $50. And not like on Wall Street, sometimes people use the word bucks to mean millions. One Ulysses S. Grant. And I was like, oh man. So I sent an email. They didn't have a phone number or a, um, uh, an address or any way to contact me. So I sent an email to him and said, I just sent you $2 million. You got to increase my limit. And 4 days later, their one employee, a guy named Olaf, wrote back and said, okay, it's $300. I'd still be trading. Like, it would take like 7 years at $300 a day. Yeah.

That's crazy. Yeah. I, you know, I think people forget, especially people who maybe got into the industry in like 20, I feel like 2020 with DeFi summers when it really thinks like this big on-chain migration happened. I think people forget that for several years you just had to build the infrastructure, right? The custodians, the, the, the exchanges.

So, oh yeah, there was a really support this whole— yeah, there was a crazy time where I had 2% of the world's Bitcoins in my head. You know, there was no custodians that, you know, Coinbase didn't exist. Um, Mt. Gox was the biggest custodian of, of Bitcoins at the time, and so I had to keep a lot of Bitcoins in as a password in my head. That was—

you, you guys owned 2% of the Bitcoin?

Yeah.

And I, I—

you've probably—

you've been trimming since then?

Yeah, so we've been, uh selling that to buy other things. Uh, our investors are taking profits, so we still have about $1 billion of Bitcoin.

Nice. Um, maybe actually before getting too deep into Pantera and the fund and the investments— and you guys have been extremely active in DApps— um, I actually want to just talk macro. So, uh, you spoke at Permissionless 2024, I think about a year ago. You spoke at Permissionless, and it was you, Jan van Eck, my co-founder Mike, and Dan Tapiero. And you guys were talking about macro and the Fed, and you said, look, I actually still have a very out-of-consensus view on the Fed. You said back in December 2021, rates were at zero. You said rates were going to 5%. They're going to stay there for a long time. I'd love to get your— I mean, we're recording this on Friday, kind of an interesting week, right after they started cutting. Love to get your just broader view of the macro. And the context of that question is tied in with like you were loading up the dump truck in Bitcoin in 2013. What's the situation for Bitcoin look like today, 2025, as compared to back then as well?

Sure. Yeah. So on the Fed, I vividly remember in December 2021, Fed funds were zero, the 10-year note was 1.3, and inflation was 8. I'm like, that is so wrong. And so, uh, the only trade I've done other than crypto since 2013 was a big bond short right then. I thought both would go Fed funds and the 10-year would go to 5%, um, and I said then they would stay there for a long time. I think they should still be there. Like, I think it's crazy to cut. Inflation's 3%, uh, unemployment, you know, is record lows. It's, you know, they— Fed's supposed to have price stability. 3%, you know, having your currency debase 3% a year over your lifetime, that's 90%, right? Like, it's, it's devastating. So I think the Fed shouldn't be cutting. I think they should be, you know, raising rates if anything.

So you would be— you would be raising rates, right?

Yeah, if inflation is very persistent, um, and, uh, you know, it's having real impacts, right? The housing inflation is, is really an impact to the younger generation.

Yeah.

So, um, you know, so there's really important dynamics with inflation, uh, and so I think they should keep rates high.

Yeah. Um, I want to, I want to make this mostly about Bitcoin, but just, you mentioned housing. So I've heard you say one of the biggest mistakes, policy mistakes ever, was the Fed injecting trillions into the mortgage bond market. How do we get out of that situation?

Yeah, honestly, I think it's a massive policy mistake that they bought $9 trillion of mortgages. They forced the, um, mortgage rate down to 2.5%. So they're basically daring you not to buy a house. Yeah. And You know, a lot of people did. And so, uh, the Fed did more than 200% of all mortgage lending in those two years of the, uh, 2020 and 2021. Absolutely crazy. So that— excuse me— that built up their balance sheet. I guess I haven't looked at the balance sheet in a while, but I think they're just letting it roll off very, very slowly. But there again, they should, they should reverse that mistake and get, you know, let the free market do lending, right? Why, why is the Fed the one in there manipulating, uh, mortgage bond market. And again, it really does have a very big social impact. Over those 2 years the Fed was manipulating the mortgage market, housing prices across the entire country went up 40%. And so that's just so tough for, for young people, or for the, you know, 35% of Americans that don't yet own a home. You know, it really prices them out. And, and that's actually one of the reasons I think that, um, crypto is so popular, right, is the young generation realizes that it's a great way to invest Great way to hedge against these, these policy errors. And back on inflation, the US is running a $2 trillion deficit in the best of times, right? When something bad's gonna happen, it's gonna be pretty tricky. And so that's another reason the Fed should be tight, because fiscal policy is extremely loose.

Yeah. Do you have a sense of how we get out of this, out of the— we're spending more on interest than our military right now?

Hashtag buy Bitcoin. Yeah, like, no, really, really, I don't. That's why I'm so bullish on crypto. It's like It seems like everyone's kind of agreed that we're going to have massive deficits literally forever. As you say, we're now spending so much in interest that it's kind of a self-reinforcing spiral, that the higher rates go, the more you have to borrow. And so I actually don't see how we get out of this. And I do think it's a big issue for our country. And I think you really have to hedge by being in hard assets like cryptocurrency.

Yeah. How far along on the spectrum of like, um, uh, Bitcoin— we're gonna, we're gonna— Bitcoin will be the new global reserve currency. Like, maybe, you know, there's one side of spectrum is like, I like Bitcoin as an asset, but like, you know, the dollar and like, you know, like, the dollar's fine, dollar will always be fine, it's the US, whatever. All the way on the other side of the spectrum is like, we should be, you know, the Bitcoin should be the global reserve currency. How far along on that spectrum are you?

Yeah, so you got to remember, uh, the reserve currency's changed every 80 or 100 years, you know, like it used to be the Portuguese escudo and the British pound.

And, you know, no one's ever really lasted for more than, let's call, 100, 110 years.

Yeah, so, you know, it's not coming up on our time. Yeah, it's not inconceivable that the dollar will be supplanted. Um, I think it'll take a decade or two, you know, so I don't think it's going to happen overnight, but you're starting to see it. The US having a strategic Bitcoin reserve Wyoming has a strategic reserve as well. And then you're hearing other countries start to do it. The UAE and other countries in the Gulf are starting to do that. And I think the big one will be countries that are— and those like the Gulf, they're all pegged to the US dollar, they're all very tightly aligned with the United States. But the countries that are antagonistic to the United States, like China or Russia, I think it's it's inevitable that they'll ultimately put a good chunk of their reserves into Bitcoin. Because if you think about it, China has, I think, $1 trillion of US Treasuries. You know, Scott Baskin can just cancel that, right? Like, I mean, it was really pretty crazy to have your entire country's life savings in an asset that your potential adversary could literally just cancel. So I think within a decade— I'm not going to say it's going to happen overnight— countries like that will have started to save in Bitcoin and other cryptocurrencies.

Yeah, I think it'll be far faster than the— I mean, look at the gold run that's happening right now. You could probably argue that's a central bank-driven gold run.

Yeah.

Right. And so as that shifts more digital, what do you think? Maybe the last thing on macro, and then we can start to get into crypto and DApps and stuff like that. But what do you think? Just like, I mean, we started— we just started cutting. You said we should maybe be hiking or at least staying flat. What do you think the next like 12 to 18 months look like? Just on the macro side of things.

Yeah, I think— I do think that the risk to bonds and currencies is pretty high because inflation is very high, fiscal policy is very loose. The dollar was very strong, it's starting to weaken. And again, there, I think things like tariff wars really undermine the confidence in the dollar. And as a reserve currency, it needs to be predictable, stable, you know, all that stuff. And so the more, you know, kind of weird things like tariff wars that happen, the more people are going to want to look for alternatives like gold, you mentioned, and Bitcoin and other, you know, hard assets like that.

Yeah. Do you think Bitcoin is still primarily driven by halvings and liquidity cycles, or is it kind of starting to decouple from traditional risk assets?

Oh, those are actually two different questions. So I think the halving is very important.

Yeah, I guess there's almost like a 4-year cycle question and a halving question, and then there's a traditional risk asset. So maybe actually let's start with the traditional risk assets because the last decade or so, it's kind of been mirrored a little bit to the risk assets. It's just a little further out on the risk spectrum. What do you think? Does that continue? Does it decouple? Is it all one trade basically?

No, actually, I don't think it is. The way I think about it is over the 13 years we've been managing money in the Bitcoin space, Bitcoin as a proxy for, uh, the cryptocurrency industries had a 0.17 correlation with the S&P 500. So that's very low, actually. And, um, there was a time in 2022 that it was very highly correlated, got to 0.76 at one point. And I think that was, I would say, a kind of once-in-a-generation anomaly. Uh, there was a lot of excess leverage in the system. There's a bunch of hedge funds and, you know, Celsius, BlockFi, all these things that— FTX— they were unwinding at the time. And then it was a little bit of a you know, kind of a go-go tech type trade where, you know, ARK was long Bitcoin and Tesla and all these things at the same time. So that did make it correlated for a short period of time, but that's essentially gone away, and now Bitcoin's back to being very low correlation with risk assets. The hugely important point is I think we're in a multi-decade secular bull market in crypto, which has little cyclical wiggles, right? Like, if, if, you know, if the S— if you told me the S&P was going to go down 30% tomorrow, yeah, Bitcoin's probably not going up tomorrow. So I do agree in the short, short run they are connected, but in very large pieces of time they aren't connected. The important reason is the reason a bunch of risk assets are highly correlated is not because they intrinsically have anything to do with each other, it's because everybody owns the same thing. When I started out as a bond trader in the '80s, I had no idea what was going on in the rest of the world. I couldn't care less about equities, anything else, because bonds were kind of their separate thing, but modern portfolio theory has been so successful, everyone kind of has the same portfolio now. And so that's what makes things highly correlated. The interesting bit is the majority of institutional investors have a weighting to cryptocurrencies and blockchain venture of 0.0. So that's why it isn't correlated because most institutional investors, big investors, don't have any of it.

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What about the second part of the question? What about the 4-year cycle, supply shocks? I mean, you guys have had— people should go down a little rabbit hole of your guys'. You guys have been writing these great letters publicly for many, many, many years. And you actually— you guys don't really gloat about this, but you actually tend to have some of the most accurate price predictions I've found, which is why I keep reading your guys' letters. And a lot of them are actually, I've noticed, still around just like 4-year cycle and the halving and kind of these— some, like, what I quote around this, like, old metrics that Bitcoiners point to, but you guys are still pointing to them, and I think a lot of your predictions have held true. What do you think about this 4-year cycle idea?

Yeah, no, so I very strongly believe in it. We've done 3 halvings in our time in this business, and they do follow a very predictable pattern. And when I was in college, there was a professor that wrote a famous book called A Random Walk Down Wall Street, where he argued that markets were efficient, you know? And Warren Buffett had a line that the markets are often efficient, but the difference between often and always is worth $80 billion to him. And that's the way I think of it is, yeah, we all know the halving is going to happen on a certain date, but when it actually happens, there's literally half as many Bitcoins being dumped on the market every day by miners. And if you have constant demand and half as much supply, it will push the price up. And so what we did on the first halving is we took a look at— the stock of Bitcoins that were existing and how much the halving was reducing the issuance. And at the time, it was actually 15%. Like, it was— the halving was actually a really big impact relative to the small stock of Bitcoins because there's about 12 million outstanding back then. And so each halving is obviously half as big as the last one in terms of how much it's cutting, and then there's more Bitcoins outstanding, so it gets smaller and smaller. By about 35-40%, it's— the impact's about 35 or 40%. Of the previous halving. So when Bitcoin was around $17,000 a couple of years ago, 3 years ago, we made a recalculation of all of the halving statistics and predicted that Bitcoin would hit, I think it was $118,542 on August 11th, 2025. And it did. It was one day early, but it was literally—

Yeah, I love that.

No, no, it hit exactly that.

It was wild.

So I believe it, right? I really think that cycle is Yeah.

If people didn't follow that, so you guys made a call, I think it was November of 2022 that on August 11th, Bitcoin would hit 117, the number was 117,482. And you were one day off.

Yeah.

Yeah. Yeah.

It did it on August 10th. Yeah. So, uh, so yes, I am a believer in the 4-year cycle. Uh, and, but the important point is each cycle is only 35, 40% as big as the previous one. Right. So the next cycle will be more muted and then you know, hey, you know, 20 years from now, there'll be tiny wiggles.

Yeah. What is your thought on— so I mean, let's keep, keep going with that, with that conversation a little bit. So the cycles would say so December 2017 was the top, November 2021 was the top. People are saying, you know, we've got, you know, DApps and maybe DApps feel a little ICO-y right now, like a little bit of froth in the market, a lot of tailwinds driven by positive regulations. Maybe it's feeling a little bit frothy. Um, hey, is this, is this the end of the 4-year cycle here?

Yeah, so, um, when we were talking to, uh, one of our investors, he complimented us on exactly predicting that price point, but he said, but does that mean it's gonna start going down today? Uh, and so yes, um, the past cycles would say that that should be the peak and that we're gonna now, you know, go into a roughly 2-year, uh, bear market. These are the most dangerous words in investing to say this time is different, but I actually do think there's such a massive change, particularly on the regulatory side in the United States, that we could see the cycle persist for a period of time, 6, 12 more months. I do think there's such an amazing change in the regulatory situation in the US that we could have this cycle keep going.

Yeah. Do you have thoughts on what the next bear market would look like? And I think that— so there's a lot of founders who listen to this. I think a lot of people who hold crypto tokens, but a lot of founders too who think about like, when do you take risk off your business? When do you put a hiring freeze in place? When does it— how do you, how do you kind of think about managing a business through this? So how do you think about, um, uh, just like how intense the next bear market could look like?

Yeah, so it has, uh, been very consistent that there's been 2 years of bull market and 2 years of bear market. And so our advice to founders is typically try and have 2 years worth of, of, uh, burn rate on the— in the books, you know, because we will go through another bear market and you have to survive those. Um, but as more and more people invest in the space, these gyrations will be more muted. Um, the early rallies, like our— the 2013 rally was 10x in 6 months, or probably even 3 or 4 months. It was, it was amazing. And then it went down. The, the The sad thing is it's gone down 85% 3 times in a row. Yeah. The 3 bear markets that we've lived through has been 85%. My prediction is it won't be that bad the next time. But I did say that the last time and it was.

But it wasn't 85% in '22, was it?

Yeah. So the funny thing is the total crypto market cap or at least Bitcoin. I think Bitcoin went down 85% from really from April '70 to like '15. Yeah. Yeah. And the funny thing about our market is we get all hyped and we start drinking the Kool-Aid and we're believing our own spin. The former chairman of the CFTC, Chris Giancarlo, reminded me that the previous peak in 2017 was the day futures were listed on the CME.

Oh yes. Yeah, of course.

Because we're all like, it's going to the moon, it's going to the moon. And then the day futures were listed, it started going down and went down 85%. Yeah. Do you remember what happened? Peak of 2021. I mean, no, Coinbase IPO.

Coinbase IPO, yeah, yeah, everyone's like 400, yeah, he's going to the moon.

And literally that was the peak.

Yeah.

And it started going down the next day and went down 85%.

So give me your kind of indicators. What's the, what's the Coinbase IPO-ing of this cycle?

Yeah, so that's a good question. And the Coinbase one, um, really made sense to me because that didn't bring any new money into the markets. It didn't change how many people were buying Bitcoins. It just— the company went from being privately owned to publicly owned. Um, right now what is happening is it's bringing money into the crypto space. All these IPOs, these DApps, they are really drawing capital in. And so that is a permanent, you know, push up in the price of crypto. Um, I, as I said, I'm still bullish for the next, say, 6 to 12 months. Uh, and so we're trying to be you know, um, kind of intellectually honest with ourselves and think about what that catalyst will be or what the sign is that we've reached a peak. But I actually don't, don't see it. And you mentioned, you know, DApps might be like ICOs. I think we're still pretty early in the, the DApp, uh, kind of concept. Um, and so it, it, it does feel like we still have quite a ways to go.

Yeah, yeah. But, but by the way, I actually don't think DApps are like ICOs. I think it's, um The structure is not anything like— it's that they are the thing that has grabbed the attention this cycle. And that would be the comparison there. As someone who's basically bet their career on crypto, how do you think about— let's say you start to see these signs, it's like July of 2026, you're seeing the signs. How do you think about actually trimming positions? I mean, even in like your PA, right? It's like, you don't ever want to sell your Bitcoin, but you might think the market's frothy. So how do you balance those two? Conflicting ideas.

Yeah, so we, um, are trying to always catch these cycles and, and return capital to our LPs at the right time. Um, in our venture-style funds, we have the, you know, the choice of when to sell things and when to return capital. So that is something we're actively, uh, thinking is, you know, at what point in the next, you know, 6 to 12 months will we take a lot of risk off the table and send it back to our LPs. So our current view is to try and do that, you know, over the, you know, the peak of this cycle.

Yeah, it's a good goal.

It's a good goal. It's easier to say than do.

Yeah, good goal. Um, I mean, we'll see. It should be a good— I was, uh, I was looking at Bitcoin seasonality and average monthly performance. Um, October historically is the third best month of the year. Now, sample size is small relatively. This is 2010, actually 2010 to 2024. October is the third best month of the year. November is the single best month of the year.

Yeah, so you're right that it often peaks in November or early December. Yeah, you know, it really has done that quite, quite a number of times.

Yeah. Um, you guys had a piece the other day on, um, kind of phase 2 of the bull cycle, uh, and, you know, you kind of talk about this, uh, known idea which is Bitcoin tends to lead the cycles, then we kind of start to rotate, maybe rotate into the majors. We saw the rotation to ETH. Now we're having a big rotation to SOL, obviously, which I want to get into SOL and the DAT in a second. But, um, how do you think the maybe phase 2 of this bull market looks like?

Yeah, so that is our view, that historically Bitcoin's led for the first half of a, of a rally, and then the other, uh, currencies catch up. Um, and, and you're right, you know, Bitcoin's dominance did peak, you know, 6-8 weeks ago, um, and Ethereum had a huge run. Now Solana is having a run. Um, I would say I am surprised that kind of a broader mix of altcoins hasn't performed as well. Um, theoretically, the change in the SEC should be positive for things that are not Bitcoin, right? Because, you know, Bitcoin kind of had a safe haven in the previous administration, whereas, uh, even things like XRP were being, you know, um, criticized by the SEC. So I, I would say that I, I would think that other, uh, currencies would, would start to perform well, but they really haven't. You know, it's really just been the big 3 currencies.

Yeah, I thought, um, actually Jeff Dorman from ARCA— yeah, here's, here's how he categorized it. He said, what's done well this year? Tokens with ETFs or DApps, Bitcoin, ETH, SOL, uh, crypto stocks, right? Circle, Galaxy, Coinbase, uh, US government coins XRP, LINK, maybe people with ties to the administration and then companies that are making a ton of money and passing it back to the token holders, right? Things like Hyperliquid, Pump, Syrup, Sky, things like that.

Yeah.

So, well, yeah, and that's basically it. And then there's major— so there's dispersion for the first time really ever.

Yeah. Yeah. So you did point out a hugely important theme is things that have a publicly traded access vehicle, either an ETF or a DAPP, Those are the things— or publicly listed company like, uh, Figure or Circle— those are the things that are doing well. So it's the public markets access that's driving this.

Yeah, let's talk public markets. Um, two, two maybe big buckets of conversation here. One is DApps, one is just crypto IPOs. Love to get your take on just broadly— I mean, the crypto IPOs, it seems like anything that can get public is going to catch a bid right now. What, what do you make of this?

Yeah, so I, I, the way I think about it is essentially there was, uh, there was, you know, 6 or 8 years worth of, uh, companies going public stuck in the pipe, and now they're just bursting out, right? Circle tried to go public a few years ago, uh, finally got to go public, um, this year. Figure, um, you know, other companies like BitGo are thought to be coming public soon. Um, there's just— what I would say is there's a huge pent-up demand from the public markets to invest in publicly listed assets in this dynamic space. This is, you know, it's the trade of a generation. Bitcoin and cryptocurrencies have produced returns that are just, you know, you can't get anywhere else. No other asset performs like that. And so now you have, um, the ability to buy things like that in the public markets. Uh, and I think it's really important that there are crypto companies in the S&P 500. So index investors, of which there are trillions, have to have a position in crypto, right? Like, if you, uh, are benchmarking yourself against the S&P 500, you have to have an opinion now on crypto-oriented companies. And I think that is kind of forcing people to make a decision and forcing people to get invested. Yeah.

Who else do you think— okay, so you guys have had, you have 4 companies that have gone public. I'm trying to do the math here. You have Circle, you have Figure, Figure, Amber. Amber.

Yeah.

Is there— maybe there's a fourth one. I forget. But at least those three. Who else do you think? What are— what are kind of IPO potentials that you're looking at?

Oh, and one fun one that, you know, we did help Galaxy get all their earliest positions.

Oh, nice.

So that's a 12-year relationship that went public this year as well.

So nice. Their stock's going on a little run here.

Yeah. Sorry, I've forgotten.

Who else do you think gets out? Because there's this kind of big bucket, right, of like the people who are next. Like, I think A lot of people are looking at BitGo, like, like you mentioned. But there's this bucket of like, maybe it's this year, maybe it's next year. It's kind of the, the Asian exchanges, some of the European exchanges. Obviously, Kraken is a big one. There's maybe the Fireblocks and Anchorage of the world. Who do you— how do you think about the— like, who kind of— who should go public? Who should go public, basically? Oh, who could and who should?

Yeah, I mean, I think it's great for our industry. Obviously, there's excess demand for, um, publicly listed crypto companies. So, uh, I would love to see all those names that you just mentioned go public. I think it'd be great. Uh, you know, Ripple Labs would be another one that could go public. Um, it's hard to forecast who, who is going to do that, but I think, you know, most of those names will have gone public in the next 12 months.

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What about on the, on the DApp side? I think you guys might manage more DApp capital than anyone in the world.

We manage $1 billion of DApps.

You manage $1 billion of DApps right now. That's in— because you guys launched the DApp fund in July. This— I think sometime this summer you guys launched your DApp-only fund and then you guys just got into the market with, I think, 2 DApps, not just one. You did the Helios, the Solana DApp, and then another one that Marco's running, I forget the name.

Yeah, we're unaffiliated with that.

Unaffiliated with that one. Okay, my bad. So, so Helios, is that a billion across?

No, it's a— we manage a billion in other DApps. And then our HSDT Helios DApp is, it's about $2 billion in value right now.

Oh, wow.

Okay.

So that's okay. Why give me your— give me your just like, I don't know, thesis for these dApps. It sounds like you are still very, very excited about them. Uh, give me your thesis for it.

Yeah, so it's all about access, right? Um, we provided the first access for investors to invest in Bitcoin in 2013 when it was really hard to get access to it and to store it. Uh, and so I think of dApps as essentially the next evolution in that, uh, providing access. Um, for us, we've historically had a $1 million minimum for our funds, and most of our investors have to meet the SEC's qualified purchaser, uh, threshold, which is very hard. So a DAT is a way to actually offer access to anybody, anybody with a brokerage account. And the median trade in our DAT has been $1,000, right? So it's literally a 1,000 times smaller than our typical investor. Um, and it is allowing people to get into the, the markets. Um, and DApps really do have a fundamental advantage. They can increase the number of tokens per share. Uh, Strategy's done a great job at that. Last year they increased the number of Bitcoins per share by 76%. I think they've done it about 30% this year. So the way I think about it is a DAT in its worst case is just— ends up being an ETF, right? Like, so if with yield, right? So if you do a Solana DAT and it really just doesn't go well and it trades at par, it'll still have, you know, potentially something like 7% yield from staking, which is better than an ETF which never increases. You just, you know, you're stuck with it. But if you're able to increase the number of tokens per share you're adding a great deal of value.

Yeah, we had, we had Kyle Samani on the show the other day, and we're talking about how that— I mean, it sounds like one of their plans at— what's the name of it— Forward Industries is going to basically plow, plow capital back into the on-chain ecosystem. I'm curious. And I think their plan is you basically specifically want to almost arbitrage rates in on-chain and off-chain world. So you want to basically go to the bank, maybe try to borrow it, you know, 6, 7% or something. Move it on to Solana, maybe you can get yield of 14% and then you're clipping 7% right there. How do you think about— I don't know if you've thought about that arbitrage or you've thought about just like moving capital on-chain.

Well, uh, to our way of thinking, the value we can add is being able to access Solana tokens below the spot market via, uh, you know, big holders that own locked up blocks and things like that. And we actually did that very well in the early days of our Bitcoin fund. We, um, our Bitcoin funds actually outperformed the price of Bitcoin because we were able to buy things at a discount. Like back in the day, Expedia and companies like that had nowhere they could sell. There's no exchanges. So we were buying big blocks at a discount. We hope to do the same with, uh, HSDT by buying tokens, you know, below the spot market. Um, and if we're able to, you know, time our, our transactions well, we can add value that way. Then that brings in more capital, and it is a kind of a virtuous spiral.

Well, you guys, so you just— this was your first, uh, the Helios one is the first one you guys launched?

Yes.

Will you launch more?

Open to it. I mean, we're totally focused on, on this, uh, for now. It'll, you know, take months to do this, execute it really well, uh, and, you know, if, you know, 4 or 5 months from now we think we can add value in another ecosystem, we will. But It's, it's far from certain that we would do another one. Yeah.

Is there a, uh, you're scrolling down CoinMarketCap, is there a place where you'd get to where you're like, oh, these, these probably shouldn't have DApps?

Oh, it's a good question. Um, you know, if there's, uh, investor demand for it, you know, we, we would, uh, offer that. Uh, but you're right, you know, after a certain number of, you know, rows you get down to things that there probably isn't enough interest to warrant doing it. That—

yeah, yeah, interesting. Um, on the access point, have you guys ever thought about tokenizing, tokenizing your funds?

We have, uh, had people pitch that to us. I've been very reticent to do that. Um, you know, our offerings are, are securities, and so if we start tokenizing a security. Yeah, that's the S in SEC. And, you know, it's, uh, not as bullish as I am on blockchain. Not everything has to be tokenized right away, right? And so, uh, I don't really see, you know, much advantage to having a tokenized fund. Um, and that's why, you know, DApps are great because they're so simple and, you know, straightforward. But tokenizing a very complicated thing like one of our funds It'll happen someday, but, uh, probably not very soon. And if you look at all the big, uh, public alts managers like, you know, KKR and Apollo, they've all tokenized one fund as far as I know.

Yeah, yeah, yeah.

You know, they all do one to be cool.

Yeah.

But it's not like, oh, their clients are doing it.

It's also not, not their most sought-after funds I've noticed.

Yeah. As far as, and again, I don't follow too closely, so maybe I'm wrong, but my perception is they, they all did one fund and then there isn't this huge clamor to put all their funds on the blockchain. And again, a couple decades from now, probably everything will be on the blockchain like that, but right now it's just not an urgent need.

Yeah. I would love to hear your thesis for Solana, Dan.

Yeah. So I guess the way to think about it is on almost every metric, it leads all the other currencies in terms of daily active users, revenues. So it is actually very practical. People are using it for a ton of commerce. Massive throughput, whereas the two older chains do only a few transactions per second, then require L2s and other hoops to jump through. And then over the last year or so, we've been increasing our conviction and it's now our largest position.

Solana is now your largest position?

Yeah.

More than Bitcoin?

Yeah. So we have 1.3 billion of Solana, um, because we think it is, uh, you know, very attractive. And one of the reasons—

what is that compared to your Bitcoin versus ETH? I'm curious. So Bitcoin's like a billion.

So we have, uh, similar amounts of Solana and Bitcoin, and then our ETH exposure right now is pretty small. Um, we're, you know, we're very convicted, uh, on Solana. Uh, and frankly, hey, it's 5% of the price of the market cap of Bitcoin, right? So it seems like it could outperform over time.

Is that a, um, is that driven by what you think the institutional allocators will see with it? Is that driven by where you think founders will build? Where, what, how do you make a thesis like that?

Yeah, so it's, it's all of those things. Um, you know, uh, the number of founders— I think this is a true stat that, you know, Solana is picking up more developers It's starting from a smaller base, but every year they're picking up more developers than Ethereum. So they're growing at a very rapid rate relative to Ethereum. And then people are starting to get exposure to Bitcoin through ETFs and strategy and other things, but most people haven't addressed Solana yet. And so that's why we think offering access and trying to at least highlight the case for Solana is going to bring more people in and over time could outperform Bitcoin. Yeah.

Um, what do you think when you, you probably speak with more real allocators than, than most people in crypto. What is the conversation like on the ground when you're having these conversations?

Yeah, so the, the good thing is, um, in the early days, you know, you get, why are there 21 million Bitcoins? You know, just super basic questions where people had kind of, how do you know there's really 21? Yeah, exactly. Yeah. And you know, what about the Silk Road guy? Or, you know, like, so you'd get these really, really kind of negative and, and basic questions. The, the huge difference now, I mean, investors that know an incredible amount, you know, drilling down on deep end and like, how does this thing, you know, like super detailed. And that, that would be the big change is now, uh, you know, most institutional investors have a blockchain group and, you know, experts, and they really are, you know, very knowledgeable about the space. And so that just makes it a lot easier. You know, you're not starting at the absolute 101 basics.

Yeah. Why, um, why are so many people still stuck on zero though? Yeah, like, what, what is the— now that it's like, you know, we're not, we're not in Gensler's SEC anymore, the regulatory, regulatory stuff is done, we've got publicly traded crypto companies, we've got the dApps, like Why, why are people— why do people still have zero crypto exposure?

Yeah, so I, I think we had a huge setback in the 2022 period where there were big public pension plans announcing they were going to invest in crypto, uh, sovereign wealth funds were investing in crypto, and unfortunately quite a few of them invested in things that went to zero very quickly, you know. So some very high-profile investments in FTX or Blockworks or whatever and then like immediately zero and high profile, you know. So, uh, and then, uh, Terra Luna blew up— uh, not blew up, is a criminal enterprise. Uh, FTX was a criminal enterprise. So such bad stuff, you know. Celsius and, you know, all Three Arrows, all these things, terrible. And then the SEC was suing Coinbase and Ripple Labs, right? Like, that's scary, like, as an investor. So there was this period in 2021, 2022 where I thought, oh, it's really going to happen, everyone's going to, you know, come in on the institutional side. And then honestly, you couldn't have come up with more bad stuff, you know, for like 6 months. Just all kinds of crazy bad things happen. I do think that the, um, the election both in the White House and Congress— Congress is very important as well— changing to being pro-crypto, uh, is going to unlock kind of— that's the last thing that was kind of holding people back. And so I think over the next couple of years, most institutions will get off zero. The point being, even the most bullish endowments out there, they maybe have 2% in crypto. I think it's going to be like 8% in the end, right? So getting off zero, obviously super important, but then we're going to have to get from 1 to 2, and then from 2 to 4, and then from 4 to 8. So that is why I'm so bullish, that we still have so much room to go.

What will be the access point for these folks, do you think? Is it a Bitcoin ETF? Is it a DApp? Is it a— I mean, funds obviously I think were the first access point. Is it buying Coinbase stock? What's the access point?

Yeah, so I do think it is a bit all of the above. That, um, you know, in the early days it was very hard to even just buy Bitcoin, like, you know, uh, and so, you know, they would go through funds like ours Uh, but now you, like you said, you've got a bunch of great firms, uh, in the space that manage money, like our peers. Uh, you have publicly listed companies like Coinbase and Circle and Figure, those kinds of companies. Then you have the publicly listed digital asset treasury companies which provide access. And so you're really starting to get a wider spectrum of investable vehicles.

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Maybe getting into Pantera a little bit. There's Pantera, the firm, and Pantera, the funds. Let's talk about Pantera, the firm. Like, I'd love to just learn about the— I mean, I know you guys are like the longest running crypto fund, I think it is. But what is the— like, how do you think about what separates Pantera versus other people? Like, how big are you guys? How many people work there? What's the— I'd just be curious to hear how you think about Pantera as the firm.

Sure. So it was founded in 2003. '03 when I left Tiger Management. We managed macro hedge funds for the first decade, and in 2013, we launched our first crypto fund, and also our first venture fund was in 2013. Ripple Labs was our first investment when they were trading at $17 million. Nice.

Not too shabby.

So we've been essentially just trying to offer access to whatever era that's happening. And so we've done 4 venture-style funds. We're raising our 5th one now. We've done probably 10 or 12 other types of funds. We have a fund that invests in private tokens, so what used to be called ICOs, but pre-public tokens. We've offered access vehicles for Solana, TON, Worldcoin, DAT funds, just trying to help people get exposure to the space. We manage $6 billion. We have 85 really talented people. And I would say one of the differences is we've been very focused on returning investor money, buying things low, selling them high, and sending the money back. We've made $6 billion for investors in direct profits, and then we've distributed 105,000 Bitcoins to our LPs. So, um, you know, all told, you know, it's, it's $10 billion or so of profits that we've helped people make. Um, not too shabby. Yeah, not, not too shabby. So we're really trying to help people get exposure and, and, and, um, invest in the space. And one of my favorite stats is in the normal venture world, 65% of things go broke, right? You, you invest in a bunch of things, 65% go broke, 1 or 2 do okay, and then 1 helps you return 1.7x your money or 2x your money. Blockchain is such a compelling space that over all these years, we've made money on 86% of our venture investments, which is just crazy.

That's nuts. 86% of your deals you've made money on.

86% of the money we've put in has been profitable.

Do you know how many of these startups have become unicorns?

Yeah, 25.

25. You've invested in 25.

Yeah, that's crazy. Again, it's crazy.

It's crazy.

And I'll, I'll say, you know, we have 85 super talented people and we work really hard, so some of it certainly is, you know, uh, our own skill, but it's a rising tsunami is floating a lot of boats, right? Like, we are in just the best business, uh, I've seen in my 40-year career. It's just there's so much opportunity, and I've even seen You know, we've invested in a couple companies that just, you know, just didn't work. You know, we were all super excited when we started and it just didn't work. Even those get acquihired, you know, because people, you know, want talented, uh, blockchain, uh, engineers and other specialties. So it really has been a fantastic space to invest in. Yeah. And like you said, the 25 unicorns is just—

yeah, that's nuts. Do you think this generational— I mean, for me, I, I few years younger than you, but like, it does feel like the greatest wealth generation opportunity of my, of my life. Um, but I'm curious if that's still— if you were listening to this and you're, you haven't been in the industry for the last decade and you're just getting in, does it feel like that opportunity is still there?

Oh yeah. So, um, I was on CNBC once and they said, hey, you know, Bitcoin's a bubble. And I was like, how can you have a bubble nobody owns, right? The median investor, institutional investor, is 0.0, right? So is not over.

Yeah.

And, and that is why I'm just— I, I still have the same conviction I had in 2013. And in that, I actually said that the reason you should invest is 99% of the world hadn't addressed Bitcoin in 2013. It's still, you know, uh, it's— I guess technically it's 67% of institutional investors have zero exposure to crypto. So it's still very, very early days. Yeah. And Remember, you know, the internet's, uh, 52 years old and there's still cool internet stuff coming all the time, right? And so blockchain is so important to remember. It's, it's super early in that. And yeah, so anytime I meet any young person, I say get into crypto, you know, and even professionally, you know, you know, invest in it definitely, but you know, spend 3 or 4 years. Maybe I'm wrong, maybe, you know, crypto is not that important and you got to go get a real job. But like, if you, um, if you do invest your career in this space you're going to be ahead of, you know, all the kind of institutional investors that have no exposure yet.

Yeah. Do you see, do you see Pantera reaching outside of crypto ever, investing in robotics or AI or launching an AI fund or anything like that?

You know, forever is a long time, so it's hard, hard to say no. But I don't think in the next like 10 years or something, because I still—

I'll just all in.

Yeah, all in. There's so much opportunity, like Before we went on air, I was talking about all the different things we're doing. You know, we got Fund 5, we're raising, we're doing a DAT, we've got a billion in other DATs. You know, just I come in every day with my head exploding of all the cool stuff we could do. And so, you know, getting into robotics or something like that would be, you know, it's just the— there's— it's a way lower return. And again, 86% of the things we invest in work, right?

So like, why would we— you're doing all right. What do you spend your time doing? Right now, Dan?

Yeah, so, um, I really do just try and help. We have a fantastic team, and, you know, they do most of the real work, but I try and help with this strategic type stuff and, and make sure, um, you know, that we're, you know, executing. And especially, you know, on this HSDT, that it's, you know, there's a lot of stuff to do— filings, and, you know, um, you know, we're trading, you know, hundreds of millions of dollars of currencies every day. Uh, the stock itself is traded half a billion shares, you know, so there's just a lot of, uh, things we need to do well. And so I'm really just trying to coordinate fantastic—

do you still help court? Are you still in the minutia of some of that stuff?

Yeah, so, you know, we have fantastic partners. Like, the, the DAT business is, uh, run by Cosmo Jiang. And, um, so he's doing, you know, managing the team and doing, uh, you know, the details. But there are a lot of important bits of, you know, trying to make sure all these things get done correctly. And you know, helping our investors get invested in things, you know, so there's just a lot going on.

Yeah. Shout out Cosmo.

Cosmo.

Yeah.

Cosmo is great.

Cosmo is great. We love Cosmo. What do you— so you guys have— so you've invested in 25 unicorns. I'd love to— I don't know if we were talking about one of the founders in your portfolio who, you know, has recently had a big success and you're sharing some funny stories about how he manages the board. I'm curious, A, I don't know if you're open to sharing that publicly, but B, I'm curious, like, what you've seen is what makes this the standout founder so stand out.

Yeah, so, um, we were just talking about Mike Cagney, the founder of, uh, Figure. He is just so focused on execution. So the thing I would say about him that's, that's so amazing is he both can visualize the future and then actually make it happen. And in the venture business, you meet a lot of dreamers who can visualize the future and have a lot of thoughts about, you know, where it should go. Uh, but I, I've been blown away at how focused Mike is on actually executing it. And he, uh, he gets a ton out of his board. Um, he'll ask, you know, he'll send a request like, do you know who'd be a good chief marketing officer or something like that? And then, you know, if I haven't replied like instantly, he's, you know, pinging me again. He's like, you know, just really just hassling. And he gets results. So then we, you know, we get him stuff and, and the company keeps moving forward. And so I'm really bullish on his prospects, and I've actually known him for about 25 years since he was a macro hedge fund manager in San Francisco when I was first doing Pantera. And then obviously he did SoFi in between. And so he's, he's a fantastic founder, and it really is, you know, that ability to see the future and execute it and motivate a team, you know, to all follow your vision. And you know, so those, those are the founders that, you know, really work. Yeah.

Do you have, um, I'm going to try to think of the polite way to ask this question, but a lot of the founders I think who are doing well right now, they're actually, um, I really, I don't know a more polite way to ask this, but they're on the older side, right? Like, you know, Cagney, or like, uh, we were talking about BitGo, Belshi, or Jeremy, uh, who just, you know, went public with Circle. Like, these are experienced founders. I think a lot of times people think about, uh, crypto as this like young generation with, you know, a bunch of these 20-year-olds running around running these companies. But actually the more experienced founders have, I think, actually had a lot of the success in the industry. How do you think about what type of founder to back and who's going to do well in this next cohort of crypto founders?

Yeah, that's great. We should actually study our 25 unicorns and see like what's the median age and all that stuff. But you are right, the, the people we just talked about, you know, have done something before and been successful. Uh, but then there are other founders like we're, um the lead in Alchemy, and, uh, Joe and Nikhil are in their 20s, probably, or late 20s now. Um, yeah, so there are some founders that are very young. Uh, one of the things to keep in mind is, you know, we've been doing this for 12 years, so even, even the young guys are not— even if we bet on a young guy, he's not as young anymore.

Yeah, that's fair, that's fair. Are there any, um, the, the kind of bets of the last couple of years have been— I mean, for, you know, 2017 to 2020, you had to build up the capital markets, I'd call it, prime brokers and custodians and exchanges, um, obviously stablecoins, tokenization, things like that. What do you think the next 5 years could look like? Like, where, where would you guys place your bets?

Yeah, I guess if, if we could kind of wave a magic wand and kind of create something, it, it'd be great if we could then have more consumer-oriented blockchain applications, you know, um, because like you said, in the beginning we had to do very basic things like, uh, storage and exchanges. And then, you know, we're doing some kind of more sophisticated things with, with all the infrastructure. But it'd be, you know, it'd be nice over the next 5 years or so to have, you know, kind of everyday use cases that really do take off.

Yeah, you could argue things like Polymarket are, are like— is it— I think Polymarket is a consumer. It's funny because like, uh, you know, consumer, it's like, uh, there's a broader societal trend where trading is kind of intertwining with consumer.

Yeah.

So it's like, are the trading apps also consumer? Yeah. So is there anything that you're thinking about right now that kind of maybe an overused Peter Thiel question is like, what feels obvious to you that maybe others are missing?

Well, you know, I would actually say, and I know this sounds self-serving, but dApps are the thing that there's a lot of people that kind of, you know, raise an eyebrow and say, oh, dApps are kind of sketchy or they're a bubble or whatever. And I don't think enough people spend enough time to think of how powerful they are, that they are bringing more capital into the industry. And if you can keep adding tokens per share, they're going to add a ton of value. And so they are, in my opinion, superior to ETFs. And ETFs have been wildly successful. And so I would think that the DAT thing is probably going to be bigger than ConsenSys. And when I do talk to people about it, there's always a kind of a healthy skepticism. And I will admit, when I first heard about MicroStrategy, I was like, oh, I don't know if that's a great idea, right? And I put in our most recent investor letter a little anecdote about Mark Casey of Capital Group. They just did a cool article about him in the Wall Street Journal, and he's a friend and neighbor of mine, and He owned 10% of MicroStrategy back when it wasn't, you know, very well understood. And I was like, what are you doing? Like, it just seems super crazy. And his answer resonates. It still resonates. He's like, I'm a 40-act mutual fund and I'm very bullish on Bitcoin, and this is literally the only way I can express that. He invested less than a billion dollars and it's $6 billion now, right? So it's a great trade. And, and I think that's the The thing that I'm passionate about, and it's obvious to me, but I think most people still have the same skepticism I had back then. I was like, oh, this, you know, I don't know if I really believe in it. But the more work I've done, uh, on the space, the more I believe it really is an important driver and it will add a ton of value. Uh, so that is the one thing I think when people look back a couple years from now, they're gonna go, wow, you know, that was, yeah, that was a huge, uh, trade.

And you think the, uh the DApps and the ETFs will coexist?

Yeah, they'll coexist. You know, everyone has, uh, their own kind of way they like to do their investing, uh, but my construct is that, you know, DApps have the ability to do things ETFs don't. You know, ETFs are always just going to be one for one. They're never going to grow the number of tokens per share. Uh, most of them don't do yield or staking, so Seems like DATs are one of those things that are at least as good or better than ETFs in every dimension.

Dan, thank you for the time, man.

Thanks. It's been a blast.

Yeah.