Pantera Capital, an investment fund specializing exclusively in blockchain, cryptocurrencies and companies using blockchain technology. The foundation 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 startups around the world, but little is known about it. In 2013, Dan began studying the topic of cryptocurrencies, and already in 2014, the Foundation shifted its activities exclusively to the field of Blockchain.

Today, Pantera Capital manages $4.5 billion in capital, and in 2021 they had $5.6 billion under management. Pantera uses Coinbase and BitGo as two custodians, which ensures a high level of security. Strict security protocols are followed for any transaction, including geographic verification, identity verification and video verification.

In a 2018 interview, Dan said based on the chart above:

“The gold line is a trend line for the period 2010-2019. Based on this historical trend line, it can be projected that by the end of 2018, the price of Bitcoin will be around $21,000 and $67,500 by the end of 2019. I find it extremely convincing. These are our price forecasts now.”

They didn’t get the price wrong, but they got the dates wrong. Also in 2018, Dan predicted that in August 2021 Bitcoin will be worth $115,000.

The founders

Dan Morehead has more than 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 began his career at Goldman Sachs as their first asset-backed securities trader. He founded and was the CEO of the electronic currency platform Atriax, which was closed in 2002. Led funding and sits on the board of directors of Bitstamp, and BitPesa, a Nairobi-based money transfer startup.

Joey Krug A native of Illinois, Krug graduated from college in 2013, where he was valedictorian of his class, 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 dived into the world of cryptocurrencies, developing MariPoS, which aimed to simplify Bitcoin transactions. After that, from 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 the way 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 act as a catalyst for widespread blockchain adoption and innovation,” Dan Morehouse said at one of the conferences.

Where does he invest?

Currently, Pantera Capital has 110 projects in its portfolio. They are divided 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%

• Others – 1%

Among the Pantera Capital projects at different times were Ripple, OmiseGo, Polkadot, Near, Dot, Ftx, Sushi and many other 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 deals has decreased due to the launch of new directions within the company. On average, Pantera Capital enters into 10-12 deals per year, but this number is highly dependent on market conditions.

Investment strategy

Pantera Capital makes money by taking investors’ money, directing it to projects it considers promising, and bringing income to investors in exchange for commissions. The company has 5 funds: Blockchain, Venture, Bitcoin, Early Stage Token and Liquid Token. The firm also plans to launch a $200 million Select Fund that will focus on “more mature, income-generating companies.

• Blockchain – investing 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 the 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 mostly 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 asset holding period. Venture funds are created for 4 years. Venture is an early-stage token investment strategy with a liquidity horizon of 1-3 years. 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 $23M and yields 41.9% IRR. The third fund was created in 2018 in the amount of 175 M$ and this fund brings 143.7% IRR today. The fact that all 3 Funds were created at the peaks of the bear market is particularly interesting.

• Bitcoin – Passive Bitcoin value tracker. Pantera provides fast and secure access to investments specifically in BTC, while removing the burden of buying and storing coins from the client, taking this responsibility upon themselves. This fund is focused on DeFi investments. In addition to investments, there is a profit from placing such assets in DeFi tools.

• Early stage Token – works as a SAFT (Simply Agreement for Future Tokens) – the right to part of the tokens issued in the future. In essence, this is an investment contract offered by project developers to accredited investors.

• Liquid Tokens is a multi-currency tool that allows you to invest in 15-25 liquid tokens at any moment. This fund is focused on DeFi investments. In addition to investments, there is a profit from placing such assets in DeFi tools.

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 the Terra/Luna project, and not long before the collapse they pulled about 80% of their investment in it. They explain this by the fact that the percentage of dominance of Terra in their portfolio has increased many times over. To minimize risks, a decision was made to fix the profit, which was already off the charts.

Currently, this fund is one of the most successful in the entire crypto industry. Many projects dream of receiving funding from Dan Morehead, because they consider this money to be real smart money. This means that in addition to money, the project receives help from the foundation in the form of increased visibility, communication and strong partnerships.