Grayscale Head of Research Zach Pandl says Bitcoin (CRYPTO: BTC) is undervalued at current levels, but the crypto market’s biggest long-term opportunity may still lie in AI-focused blockchain networks.
Two Risks Still Loom Over Bitcoin
Speaking in a CoinTelegraph interview on June 24, Pandl said Bitcoin appears cheap based on several on-chain valuation models. Although, it is not yet at the deeply discounted levels seen after the collapse of FTX.
According to Pandl, two major factors will determine whether crypto markets have already bottomed:
- The first is passage of the CLARITY Act, which would establish a regulatory framework for digital assets in the U.S.
- The second is whether Strategy (NASDAQ:MSTR) and other Bitcoin-leveraged firms can stabilize their balance sheets.
He added that while dollar-cost averaging into BTC remains attractive for long-term investors, regulatory uncertainty and corporate leverage risks still need monitoring.
The CLARITY Act Could End Crypto Winter
Pandl argued that passage of the CLARITY Act could mark the turning point for digital assets.
“Will it mark the end of crypto winter? I think so,” he said.
While the regulatory framework could take more than a year to be fully implemented, Pandl expects institutional activity like M&A, IPO transactions to accelerate immediately after passage.
According to Pandl, the legislation would give Wall Street banks, asset managers and corporations greater confidence to commit capital to crypto-related projects.
Ethereum’s Biggest Catalyst Is Tokenization
While Ethereum (CRYPTO: ETH) has struggled relative to Bitcoin in recent years, Pandl remains constructive on its long-term outlook.
He described tokenization as a "mega trend" that could reshape global capital markets over the next several decades.
"Ethereum is the biggest boat," Pandl said, noting the network remains the dominant blockchain for stablecoins, tokenized assets and decentralized finance activity.
He expects the CLARITY Act to accelerate token issuance and tokenized financial products, with ETH positioned to capture a large share of that growth.
AI Could Be Crypto’s Largest Untapped Market
Perhaps the strongest conviction from Grayscale centers on crypto’s emerging AI sector which has a huge potential upside.
Pandl highlighted projects such as Bittensor (CRYPTO: TAO), NEAR Protocol (CRYPTO: NEAR) and Worldcoin (CRYPTO: WLD) as leading examples of blockchain networks built around AI-related use cases.
While Bitcoin has already become a trillion-dollar asset class, he believes AI-focused crypto protocols remain in the early innings.
"I think there will be a $1 trillion asset in that market segment," he said.
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