Pantera Capital is looking to raise $1.25 billion for its second blockchain fund to invest in digital assets and equity, founder Dan Morehead told Bloomberg. The firm’s plan for another blockchain comes as it seeks to take advantage of the strong interest in digital assets among institutional investors.
Pantera to Close Another Blockchain Fund Amid Strong Institutional Interest
The U.S. crypto hedge fund Pantera Capital intends to secure $1.25 billion for its second blockchain fund to capitalize on the robust interest in crypto among institutional investors, according to Bloomberg. The hedge fund wants to close the new fund by May, its founder Dan Morehead told Bloomberg.
Pantera plans to use the new fund to buy more digital tokens and equities, said Morehead. He added that the new fund will also buy more shares of companies Pantera already invested in after their valuations shrank due to a tough macroeconomic environment.
“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.”
– Dan Morehead, Founder and CEO of Pantera Capital
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Institutional Investors Confident in Crypto’s Long-Term Prospects
Pantera announced its new blockchain fund a year after it launched its first, which targeted to raise $600 million. But that figure rose to more than $1 billion, Pantera said earlier this year, following the fund’s strong performance in 2022.
According to Pantera’s memo, the firm’s Liquid Token Fund and early-stage token fund returned 385.4% and 294.6%, respectively. Overall, crypto funds returned a total of 214% last year.
The move comes as Pantera, the largest crypto hedge fund in the world by assets under management (AUM), looks to increase its investments in cryptocurrencies, which now trade at multi-year lows due to rampant inflation and high-interest rates. Bitcoin continues to trade below the $20,000 threshold, with it and Ether losing over 50% in the past six months.
The ongoing crypto winter has forced several crypto firms into liquidation, particularly after the Terra-LUNA crash in May. While the correlation between equities and cryptocurrencies increased recently, Morehead believes this will not be the case in the future.
“Unfortunately, crypto pricing has become correlated with risk assets, which I honestly don’t think has to be true. My hope is that soon crypto will decouple from the macro markets.”
– Morehead added.
But even during such a difficult period, institutional investors continued to bet on the crypto market this year. Last month, the world’s largest asset manager BlackRock inked a landmark deal with Coinbase to provide crypto trading services to institutions.
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About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.