Pantera Capital, an investment fund focused exclusively on blockchain, cryptocurrencies and companies using blockchain technology. The fund was established in 2003 by Dan Morehead and Joey Krug. from 2003 to 2013 it was just a venture capital fund that invested in all possible start-ups around the world, but little is known about this. In 2013, Dan began to study the topic of cryptocurrencies, and already in 2014, the Fund transferred its activities exclusively to the Blockchain field.
Today Pantera Capital manages $4.5B of capital and in 2021 they had $5.6B under management. Pantera uses Coinbase and BitGo as two custodians, which provides a high level of security. Strict security protocols are followed for any transaction, including geographic verification, identity verification and video verification.
In 2018, Dan, in an interview based on the chart above, said:
“The golden line is the trend line for the period 2010-2019. Based on this historical trend line, one can project that the price of bitcoin will be around $21,000 by the end of 2018 and $67,500 by the end of 2019. This strikes me as highly convincing. These are our price predictions at the moment.”
They didn’t get the price wrong, but they got the dates wrong. Also in 2018, Dan predicted that in August 2021, Bitcoin would be worth $115,000.
Dan Morehead has over 25 years of experience in fund management, trading and investment advisory services. Dan is the founder and CEO of the foundation. Prior to founding Pantera, he was Chief Financial Officer and Head of Macro Trading at Tiger Management. Morehead previously held senior positions at Deutsche Bank in London, Bankers Trust and Goldman Sachs. Dan started his career at Goldman Sachs as their first asset-backed securities trader. He founded and was the CEO of Atriax, an electronic currency platform that closed in 2002. Managed funding and sits on the board of directors of Bitstamp and BitPesa, a Nairobi-based money transfer startup.
Hailing from Illinois, Joey Krug graduated in 2013 where he was an honor student before joining Dan at Pantera Capital. In his youth, he was engaged in programming. Started with the first Apple computers, then started working as a game developer at Dark Paradise Studios where he created mobile games such as Paper Flyer. In 2014, Joe plunged into the world of cryptocurrencies, developing MariPoS, which aimed to simplify bitcoin transactions. After that, since August 2014, he participated in the creation of Augur, a prediction market on a decentralized platform and was part of the development team.
Goals and mission of the foundation
Pantera Capital believes that Bitcoin can change how people use money and that it will do for payments and the payment system what the Internet has done for communications and commerce.
“Our mission is to be a catalyst for widespread adoption and innovation of the blockchain,” said Dan Morehouse at a conference.
Where to invest
At the moment, Pantera Capital has 110 projects in its portfolio. They fall into the following categories:
DeFi – 39.6%
Infrastructure – 20.9%
GameFi – 13.2%
Blockchain Service – 11%
CeFi – 3.3%
StableCoin – 3.3%
Social – 3.3%
Other – 1%
Among the projects of Pantera Capital at different times were Ripple, OmiseGo, Polkadot, Near, Dot, Ftx, Sushi and many other already very well-known projects. As you can see, most of Pantera’s investments are in DeFi, but Pantera is also positioned with Layer -1 infrastructure projects (blockchains).
The maximum activity occurred in the last cycle of 2018. In recent years, the number of transactions has decreased due to the launch of new directions within the company. On average, Pantera Capital enters 10-12 deals per year, but this number is highly dependent on market conditions.
Pantera Capital makes money by taking investors’ money, funneling it into projects it considers promising, and generating income for investors in exchange for commissions. The company has 5 funds: Blockchain, Venture, Bitcoin, Early Stage Token and Liquid Token. The firm also plans to create a $200 million Select Fund that will focus on “more mature, revenue-generating companies.
Blockchain – investments in early stage tokens, in all aspects of the cryptocurrency and blockchain market.
Venture – SAFE (Simply Agreement for Future equity) is like buying a stock before an IPO, compared to the familiar stock market. This gives the right to own part of the project or part of future shares. All investments in projects take place mainly at the early stages of Seed, PreSeed, Private, and less often at the Serie A stage.
There are 3 Venture funds, the difference between them is the holding period of the assets. Venture funds are established for 4 years. Venture is an early stage token investment strategy with a 1-3 year liquidity horizon. The first fund was created in 2013 with a size of 12 M$ and today brings 52% IRR. The second fund was created in 2014 with a size of $23M and brings 41.9% IRR. The third fund was created in 2018 in the amount of 175 M$ and this fund brings today 143.7% IRR. Of particular interest is the fact that all 3 Funds were created at the peaks of the bear market.
Bitcoin – Passive Bitcoin value tracker. Pantera provides fast and secure access to investments in BTC, while removing the burden of buying and storing coins from the client, taking on this responsibility. Liquid Tokens is a multi-coin tool that allows you to invest in 15-25 liquid tokens at any time. This fund is focused on investing in DeFi. In addition to investments, there is income from placing such assets in DeFi tools.
Early stage Token – works like SAFT (Simply Agreement for Future Tokens) – the right to a part of tokens issued in the future. In fact, this is an investment contract offered by the developers of projects for accredited investors.
Liquid Tokens is a multi-coin tool that allows you to invest in 15-25 liquid tokens at any given time. This fund is focused on investing in DeFi. In addition to investments, there is income from placing such assets in DeFi tools.
The loudest and most noticeable results
Pantera Capital has invested in a huge number of projects that have become widely known in the crypto industry. One of the best investments is considered the Terra/Luna project, and not long before the collapse they withdrew about 80% of their investment in it. They explain this by the fact that the percentage of Terra dominance in their portfolio has multiplied. To minimize the risks, it was decided to fix profits, which were already over the top.
At the current moment in time, this fund is one of the most successful in the entire crypto industry. Many projects dream of getting funding from Dan Morehead, as they consider this money to be real “smart money”. This means that in addition to money, the project receives assistance from the foundation in the form of increased popularity, connections and strong partnerships.