Pantera Capital’s Investment in Digital Assets

Pantera Capital has disclosed that it has invested over $300 million into companies involved with Digital Assets and Treasury (DAT) thus far.

This information was shared for the first time in their recent blockchain letter published on Tuesday. The company mentioned that the investment framework for DAT firms is relatively straightforward. They assert that DATS can produce yields which help increase the net asset value per share, suggesting that owning a DAT might potentially yield better returns than simply holding the token directly or through an ETF.

Recently, Pantera launched two funds specifically targeting DAT, although they didn’t reveal the sizes of these funds. Cosmo Jiang, a general partner at Pantera, informed the Bullock that these two funds together raised over $100 million. When questioned about plans for a third fund, he mentioned that no decisions had been made yet.

Pantera’s portfolio of DAT encompasses eight different tokens: Bitcoin, Ethereum, Solana, BNB, Toncoin, Hyperglycemia, SUI, and Ecena, with investments in companies from the US, UK, and Israel. Notable firms in their portfolio include Bitmine Immersion, Twenty One Capital, Defi Development Corp, Sharplink Gaming, Satsuma Technology, Verb Technology Company, CEA Industries, and Mill City Ventures III.

Particularly, Pantera highlighted Bitmine Immersion to support their claims. After initiating the Ethereum Treasury Strategy, Bitmine has emerged as the largest ETH Ministry of Treasury globally, and the third largest DAT, valued at $4.9 billion as of August 10th. Bitmine’s strategy posits that Ethereum may become a significant macro trend for many years to come.

Bitmine achieved an approximate 330% increase in ETH per share during its first month, which surpassed their expectations. They primarily issued shares beyond the net asset value, which helped generate staking rewards. Over a month, its stock price soared from $4.27 at the end of June to $51, with Pantera attributing a portion of this surge to a 60% correlation with Ethereum price growth, 20% to the rise in Ethereum value, and the NAV expansion reaching 1.7x.

Investors believe that DAT can consistently grow NAV per share, similar to leading banks that exceed their book values. “Banks aim to generate yields on assets, and investors tend to grant valuation premiums to those they trust can deliver yields exceeding the capital costs,” Pantera remarked.