Byline: Craig Brogan
An American hedge firm with a focus on cryptocurrency called Pantera Capital is making headlines with a head-turning blockchain fund. AUM is the biggest cryptocurrency hedge fund in the world, created by Dan Morehead in 2003, and Co-CIO Joey Krug, who founded Augur — the first significant Ethereum project — co-manages it. When the price of Bitcoin was $65 per BTC in 2013, Pantera created the first cryptocurrency fund in the United States. And now, Pantera Capital intends to launch a $1.25 billion blockchain fund.
Future Outlook: “Very Bullish”
When Pantera Capital raised $165 million in August 2020, it launched its first bitcoin fund.
In a recent interview, Pantera Capital’s CEO Dan Morehead disclosed that the company plans to launch a second blockchain fund by May of 2023 that will be substantially larger than the first one and will total $1.25 billion.
Morehead stated that his business concentrates on these assets because he believes in the future growth of the bitcoin industry. “We want to provide liquidity for people that are kind of giving up because we’re still very bullish for the next 10 or 20 years,” said CEO Dan Morehead.
But the sector’s current state is not exactly upbeat. The market value of all cryptocurrencies fell below $1 trillion in late September 2022, and the price of one bitcoin is around $19,000, down 70% from its all-time high price in November 2021.
Morehead claims that the unsatisfactory performance of the majority of digital currencies is caused by their close ties to other risky assets. But he believes that this tendency will soon come to an end, which would cause prices to rise:
“Unfortunately, crypto pricing has become correlated with risk assets, which I don’t think has to be true. My hope is that soon crypto will decouple from the macro markets.”
Morehead Predicts Cryptocurrency Market Changes
The CEO of Pantera Capital said that the current “crypto winter” would soon start to shift early in the last quarter of 2022. He linked it to other market drops followed by bull runs in the past. Morehead said that “we’ve been through three big bear market cycles. I actually think we hit the lows in June, and we are on to the next bull market. It might be rocky and might take a while, but I think we are on to the next leg of a rally.”
A few weeks later, Bitcoin Bank Breaker predicted that billions of people would use blockchain technology in their daily lives within the next four to five years. He asserted that this acceptance might be another driver of future price increases for various digital currencies.
What is the Fund For?
At a conference in Singapore, the Pantera founder stated that the fund would invest in digital tokens and equities, including shares of companies that Pantera already owns but whose value has declined.
The Pantera Blockchain Fund, which aims to invest $600 million in venture equity, Web3 companies, early-stage tokens, and tokens with high liquidity, was first launched in May of 2021. Since then, it has greatly surpassed that goal; in August 2022, the company disclosed that the fund had topped $1 billion.
The most recent $1.3 billion figure was mentioned on an investor conference call regarding the business’s new $200 million Pantera Select Fund, which will support “growth stage” cryptocurrency businesses that are prepared to generate revenue rather than businesses in the early funding stages that are being sought out via the Blockchain Fund.
What Will Happen if The Fund Launches?
According to Pantera, the fund will invest in businesses in various cryptocurrency-related industries, including blockchain infrastructure, nonfungible token platforms, Web3 games, the Metaverse, exchanges, and decentralised finance (DeFi).
The CEO of Coin Insider was quoted saying that this will be revolutionary as more capital in the blockchain industry will generate more stability in the market.
If the rumoured second blockchain fund closes as expected, it will be followed by Pantera’s first $600 million-targeted blockchain fund, which was launched in May 2021. The hedge fund was slated to conclude the fund backed by about $1.3 billion, which was double its aim, according to a Cointelegraph report from April. Additionally, Pantera offered venture funds with “exposure to firms building goods and services in the embryonic blockchain ecosystem,” as well as liquid token funds, early-stage token funds, BTC funds, and token funds.
After closing the Blockchain Fund II 2023, which will “basically be the same” as the prior iteration of the fund, Morehead added that the company will then turn its attention to finding new transactions in the “early-stage private token area, and new deals in the early venture space.”
In 2024, for example, Morehead said that “we will return with a larger, more diversified, and most likely longer investment period growth-stage fund.
After the ‘crash’ in mid-June 2022, the cryptocurrency market has been in a holding pattern. Since then, the market capitalisation of the cryptocurrency sector has fluctuated below the $1 trillion threshold, while the traditional markets are likewise in a state of flux. Pantera Capital wants to offer liquidity to those who are on the verge of giving up because we remain pretty bullish for the next 10 to 20 years, according to Morehead. This will undoubtedly bring a significant change to the blockchain.
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