Crypto Market Looks Cheap Against AI Stocks, Says Pantera Capital Founder

Key Insights:

• Pantera chief believes that crypto market currently offers one of its strongest relative value setups in years despite a $600 billion market cap decline.
• Bitcoin is down about 23% in Q1 2026, marking its third-worst first quarter since 2013..
• Analysts are watching $65,000 and the 200-week SMA near $58,000 as critical Bitcoin support levels.

Dan Morehead, the founder of Pantera Capital noted that the crypto market is currently at historic cheap levels. Over the last 30 days, the cryptocurrency market has lost nearly $600 billion, while AI stocks like Nvidia (NVDA) and Microsoft (MSFT) have been making strong gains. This situation could likely flip in favour of digital assets in the near future.

Crypto Market Can Take Limelight from AI Stocks

Over the past weekend, on Feb. 28, Bitcoin price crashed again to the crucial support of $63,000 before bouncing back. The outbreak of the Iran-US-Iran war sent shockwaves through the crypto market.

However, Pantera Capital founder Dan Morehead said that digital assets are approaching historically cheap levels. Morehead noted this, considering long-term valuation metrics for crypto.

According to Morehead, crypto assets are currently trading roughly 50% below their long-term trend. He noted that prices have been higher approximately 93% of the time over that period. Thus, he believes that digital assets have one of the strongest value setups in years.

Morehead also compared crypto valuations with AI stocks like Nvidia, which he said are trading about 20% above trend. Highlighting Bitcoin’s long-term performance, he added that every investor who has held Bitcoin for at least four years has been profitable. He asked investors to avoid short-term volatility and instead focus on long-term positioning.

Crypto Market Fear Sentiment Peaks Amid Israel-Iran War

The social sentiment surrounding the crypto market has reached the ‘fear’ zone with potential discussions of ‘World War 3.’ The renewed spike in commentary comes amid escalating geopolitical tensions in 2026. Moreover, the combination of ongoing military developments and prior instability has heightened investor fear.

As a result, the crypto market can face heightened uncertainty, reported Santiment.

On the other hand, banking giant JPMorgan is looking up to the passing of the crypto market structure bill. JPMorgan analysts expect the bill to pass mid-year, while predicting a strong crypto market rally in the second-half of 2026.

In a recent report, the bank noted that Bitcoin and the wider digital asset market have remained largely range-bound amid ongoing regulatory uncertainty. Analysts argued that the lack of clear rules has discouraged institutional participation. This has further led to limited capital inflows.

According to JPMorgan, passage of comprehensive market structure legislation would provide greater regulatory clarity. It will help to boost institutional involvement, accelerate tokenization initiatives, and support stronger capital inflows.

Bitcoin Heading for Third-Worst Q1 Performance

Bitcoin has recorded its third-worst first-quarter performance since 2013, declining approximately 23% in Q1 2026, according to CoinGlass data. The only weaker first quarters occurred during the deep bear market phases of 2014 and 2018.

Analysts attribute the current weakness primarily to macroeconomic pressure, market deleveraging, and heightened geopolitical volatility. Previously, sharp drawdowns in Q1 have coincided with late-stage fear rather than early-cycle optimism. Thus, liquidity conditions will play a decisive role in determining the next directional move.

Crypto analyst Virtual Bacon has shared his Bitcoin price outlook, suggesting more pain ahead. According to the analyst, the first major level is $65,000, which represents the previous all-time high. Bitcoin is already trading closer to this zone, with investors calling it a potential entry point.

The second level highlighted is $58,000, corresponding to the 200-week simple moving average (SMA). Virtual Bacon noted that the 200W SMA has historically acted as a strong support level. In 2020, it contained the COVID-19 market crash; in 2018, it marked the cycle bottom; and in 2015, Bitcoin tested the level multiple times without closing below it on a weekly basis.

He described the 200-week SMA as one of the most historically reliable accumulation zones for Bitcoin. Bacon added that this indicator is currently placed at $58,000.

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