Sovereign Competition and the Bitcoin Arms Race
Pantera Capital CEO Dan Morehead addressed attendees at Ondo's conference, stating that sovereign competition may emerge as the next major driver of Bitcoin demand. He predicted a 'global arms race' for BTC within the next two or three years, as countries reassess their reserve strategies amid a more fractured geopolitical landscape.
Morehead argued that the significant shift would occur when adversarial blocs recognize the strategic risks of storing national savings in assets vulnerable to US pressure. He emphasized that it is imprudent for such countries to hold assets that could be influenced or canceled by external forces, making Bitcoin a smarter alternative.
I would say my one very out of consensus view is I think there will be a global arms race for Bitcoin within the next two or three years. Countries like the United States are establishing strategic Bitcoin reserves. Countries that are aligned with us like the UAE are acquiring cryptocurrencies, Bitcoin.
The big one though is… countries that are antagonistic to the United States will realize like China, super crazy to have a thousand years of your life savings stored in an asset that Scott Bessent can’t cancel. That is crazy. It’s way smarter to buy Bitcoin.
I think within two or three years there will be an arms race with three or four groups, regions each trying to buy a million bitcoins, and you just want to be long before that happens.
Morehead Stays Structurally Bullish On Bitcoin
Following his arms-race thesis, Morehead explained why recent market weakness aligns with familiar patterns rather than indicating a broken narrative. He noted that 2025 surprised him given a more favorable policy backdrop, with crypto down 9% last year despite expectations of growth.
His key takeaway is that crypto trades in hype cycles, with psychology repeating across bull and bear markets. This is Pantera's fourth cycle in 13 years of trading, swinging from overconfidence in bulls to declarations of failure in downs. The solution, he argued, lies in a longer time horizon, respecting Bitcoin's four-year rhythm.
Morehead referenced a past Pantera projection where Bitcoin hit $117,452 on August 11, 2025, exactly as forecasted, underscoring the cycle framework's reliability. He acknowledged the common temptation to declare 'this time is different,' but noted it was not.
On demand, Morehead highlighted two new channels—publicly listed ETFs and digital treasury companies—that pulled forward large buying volumes, collectively acquiring over $100 billion in crypto. He suggested the market can cool after absorbing this initial wave.
Morehead's longer-term case focuses on monetary debasement and Bitcoin's fixed supply. He observed that the willingness to print money is now extreme, eroding fiat purchasing power at about 3% per year, making constrained-supply assets like gold or Bitcoin structurally attractive.
Addressing the gold-versus-Bitcoin dynamic, Morehead stated that rotations are normal, with ETF flows showing both assets are institutionalized and inflows roughly equal over recent years. Over a longer horizon, he asserted that Bitcoin will massively outperform gold in 10 years.
Regarding institutions, Morehead viewed top-level skepticism as a bullish signal, given light positioning. He questioned how a bubble could exist when nobody owns it, noting the median institutional holding is literally 0.0. In his view, reasons to avoid Bitcoin have diminished significantly, even if adoption at the largest firms lags.
Current Bitcoin Price
At press time, BTC traded at $69,418.
