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Crypto Fund Pantera Capital Is Seeking $175 Million For Its Next Venture

As reported by Ethereum World News previously, Pantera Capital has been an integral part of this flowering industry for over five years. Along with recently reaching a five-year milestone, the industry veteran has also posted a lifetime return of 10,000 percent (100x) on its foremost fund, an astounding feat to say the least.

It seems that with a recent announcement, which has been relayed by TechCrunch, that Pantera is looking to continue to achieve astonishing ROIs (return-on-investment) with a recent move to open its third venture fund.

Pantera made its debut in the nascent crypto and blockchain industry in 2013, raising $13 million for its first fund. Later, the San Francisco-based firm raised nearly double the previous amount for its second venture fund. While those funds succeeded as aforementioned, posting staggering returns through investments into early-stage crypto tokens and blockchain-centric projects, Pantera’s aspirations have not been quenched. So most recently, the investment company is seeking upwards of $175 million for its third venture fund, an increase of over seven-fold from the second investment round.

Paul Veradittakit, a partner at the firm, gave a statement on the ambitious target amount, noting:

“[The target amount is a] function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds. With more interesting later-stage investments [on our radar], too, we want to be flexible and able to move with the market.”

According to a document recently filed to the SEC, Pantera has already made a substantial amount of progress, garnering over $71 million in capital allocation from 90 individual investors or investment groups. Veradittakit notes that this new investment vehicle will be a so-called “evergreen fund,” where it will be structured to have an “indefinite” lifespan that lets investors come and go as they choose.

Previous venture investments include early-stage allocations into BitStamp, Xapo, Ripple, and Circle, which have quickly grown to become foremost players in the crypto asset industry.  So it goes without saying that Pantera’s venture investments span this multi-faceted industry and are rather successful as well. As Veradittakit puts it:

“Pantera has invested in lots of wallets and exchanges focused around the world, in Coinbases of different geographies, in enterprise-related blockchain companies. More recently, we’ve funded everything from big data to decentralized application platforms.”

Pantera’s Three Primary Investment Strategies

Many are hopeful that this new fund will succeed, with the firm utilizing venture strategies, along with three following investment strategies that have helped it excel in this nascent industry.

Firstly, Pantera has a fund that exclusively invests in initial coin offerings (ICOs) that look promising to the firm’s assessment and analysis team. As CEO Dan Morehead elaborated, this specific fund buys pre-sale ICOs, which are often early-stage investments when the risk/return ratio is at its peak.

Morehead added the fund does not only invest into ICOs but also provides “the right connections,” creating a symbiotic partnership to benefit both parties.

Secondly, Pantera has a Bitcoin-centric vehicle that has been likened to a hedge fund, with this being the firm’s flagship fund. As aforementioned, the fund has obtained a staggering 10,136% return “net of fees and expenses” on the original investment.

Last but not least, the American company’s last fund invests in established cryptocurrencies via exchanges. Utilizing a machine learning algorithm, the fund can automatically invest in cryptocurrencies, while also fitting its investments to the needs of Pantera’s executive team.

It is unclear in what direction the fund will head, but as the aforementioned firm partner notes, this industry is still in its infancy and there is still a lot of opportunity for growth.

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Bitcoin Price Decline is an Overreaction to ETF Delay, Says Pantera CEO

Since the start of August Bitcoin has been in a renewed price decline. This drop was further exacerbated by the SEC’s decision to delay yet another BTC ETF. However, one hedge fund manager believes that the sharp reaction is a bit exaggerated.

Traders are Overreacting to Bitcoin ETF Delay

According to Dan Morehead, the CEO of Pantera Capital, traders are overreacting to the SEC’s refusal to approve a BTC ETF. Speaking to CNBC, Morehead identified this overreaction as the reason for the current price slide, saying:

The main thing to remember is that bitcoin is a very early-stage venture, but has real-time price feed — and that’s a unique thing. People get excited about the price and overreact.

On Wednesday, the price of Bitcoin fell well below the $6,500 mark, bottoming out at $6,100 before staging a mini-recovery to reach to the current $6,300 price level. This decline followed Tuesday’s decision by the SEC to delay the approval/rejection of the VanEck/SolidX BTC ETF.

Despite the mini-recovery of yesterday, Bitcoin is still down by more than two percent in the last 24 hours. The top-ranked cryptocurrency is currently in its lowest level in almost a month.

An SEC-Approved Bitcoin ETF is Still a Long Way Away

Lending his voice to the ETF debate, Morehead said:

I still think it will be quite a long time until an ETF is approved. The last asset class to be approved for ETF certification was copper, and copper has been on earth for 10,000 years.

Morehead also revealed that he wasn’t surprised at the Commission’s decision given that it has been the same pattern for the previous five years. The Pantera CEO also said that the SEC is taking its time with its decision, being cautious about the ramifications of a Bitcoin ETF.

Bitcoin Price Performance is a Matter of Perspective

2018 has been a difficult year for the cryptocurrency market in general. Many coins have experienced massive pullbacks from their late 2017 and early 2018 highs. Bitcoin has declined by more than 60 percent since the start of the year.

Despite all of these, Morehead says the BTC price performance is all a matter of perspective. The Pantera chief pointed out that BTC is still up by more than 80 percent in the last 12 months. He urged investors to shift their focus from the ETF wrangling to more positive news in the arena. He paid particular attention to the proposed collaboration between ICE, Microsoft, and Starbucks.

Do you think the current price slide is an overreaction? What is your earliest time estimate for an SEC-approved BTC ETF? Keep the conversation going in the comment section below.

Image courtesy of Coinmarketcap.

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Bitcoin Performed Better than Cryptocurrency Hedge Funds, Says Pantera CEO

It seems the cryptocurrency hedge fund honeymoon is over. After a stellar 2017, revenue appears to have dwindled significantly. Recent reports indicate that the losing trend of these firms continued through May 2018.

Pantera Down by 26 Percent and Crypto Prices Continue to Decline

According to Dan Morehead, Bitcoin, the number one cryptocurrency, performed better than his hedge fund in May 2018. Morehead is the Chief Executive Officer of Pantera Capital, a cryptocurrency hedge fund company.

In a letter to the fund’s investors on June 19, Morehead said, Pantera declined by 26 percent in May. This dip is in contrast to the April surge that was about 50 percent. In total, the Pantera CEO said that the fund is down by 51 percent since the start of 2018. When compared with BTC, it appears the cryptocurrency fared significantly better. BTC prices dropped by only 15 percent in May 2018.

Diversified Cryptocurrency Investment Portfolio Turning out to be a Problem

Having a diversified portfolio is an age-old investment advice. The logic is that by holding stakes in different assets, a trader can hedge losses in one asset with the gains in other assets. It is supposed to be a safe investment strategy. However, based on the situation with Pantera, portfolio diversification might not be such a good idea.

In the letter to investors, Morehead said the poor performance of Dash, Waves, OmiseGo, and Bitshares were mostly responsible for the decline in the fund’s revenue. Dash has been in free-fall since the start of 2018 and is among one of the worst performing cryptocurrencies in the market. Dash prices slumped by more than 30 percent in May.

Waves is another digital currency that performed poorly, dropping 85 percent of its value in May 2018. Like Dash, Waves has declined significantly throughout 2018 so far. At the start of the year, the 40th-ranked cryptocurrency according to CoinMarketCap was trading at above the $12 mark. By the end of May 2018, prices had slumped to below $5. OmiseGo and Bitshares dipped by 34 percent and 46 percent respectively during the same period.

Pantera Calls Out Warren Buffet

The firm also criticised Warren Buffett for his negative stance of cryptocurrencies saying:

Buffett avoided the dot-coms, but he also missed Amazon, Facebook, Google Netflix, et al. If Berkshire buys Bitcoin as quickly as Apple — it will be in 2045. Buckle in.

Buffett has on several occasions, expressed his dislike of Bitcoin and the cryptocurrency market in general. The Oracle of Omaha has called the industry “rat poisoned,” and “a bubble.” Despite his successes in the financial market, the Berkshire Hathaway chief hasn’t always called it right, missing out entirely on many plum stocks and being to the party as far as investing in others was concerned.

Do you think it is wise to diversify your cryptocurrency investment portfolio? Keep the conversation going in the comment section below.

Images courtesy of Pantera Capital and CoinMarketCap.

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Bitcoin is a “Screaming Buy” Right Now, Says Crypto Hedge Fund CEO

According to Dan Morehead, now is the best time to buy Bitcoin. Speaking to CNBC, the founder of Pantera Capital said investors should take advantage of the relatively low prices of cryptos to make huge gains once the rally commences. Pantera Capital is one of the largest cryptocurrency hedge funds in the market. Dan Morehead serves as the CEO and co-chief investment officer of the fund.

Now is the Time to Buy Bitcoin

Cryptocurrency prices are down by an average of 65 percent in 2018. Thus, most coins are at their cheapest levels. Commenting on the market, Morehead said:

In our view, all cryptos are very cheap right now. [It’s] much cheaper to buy now and participate in the [price] rally as it goes.

Take Bitcoin for example, in mid-December, prices reached $19,600 but have since declined in 2018. BTC dipped below the $6,000 mark in February, the lowest since November 2017. Presently, the number one cryptocurrency is hovering around $7,500.

Morehead also had some tips for investors. According to him, there is a useful technical indicator to know the best time to buy Bitcoins.

When the currency breaks through its 200-day moving average, if you buy that day and sell a year later, you make an average of 239 percent.

According to the Pantera CEO, this particular indicator has revealed itself five times in the last six years for Bitcoin. Morehead also advised investors that cryptocurrencies rarely ever get cheap when compared to their long-term average price.

Today is a good day to be buying.

SEC Regulations are Imminent

Commenting on regulations, Morehead said that they were a good development for the market. In recent times, the emergence of institutional-grade custodial services for cryptocurrency has been identified as the next significant milestone for the market. He disagreed with the notion that the institutional investors were shying away from crypto due to the delays in the emergence of concrete regulatory framework. According to him, institutional investors have been in the market since 2013.

Many institutions are essentially buying the rumor [of clearly defined regulatons] and selling the fact. Getting invested now so that in three, four, five months when the institutional, quality-regulated custodians that we hear about come online, they’ll already have their positions.

Augur and Ethereum Scaling Concerns

When asked about his favorite coin at the moment, Morehead identified Augur, the Ethereum-based prediction DApp scheduled to go live later in the Summer of 2018. Morehead expressed excitement at the potential benefits of having a functioning DApp running on top of the Ethereum blockchain, showing how useful such apps can be.

Responding to concerns over scaling, keeping in mind that Cryptokitties almost ground the network to a halt, Morehead said DApps like Augur would force a fast-tracking of the scaling process. According to the Pantera chief, blockchains like Bitcoin and Ethereum need to scale. He also said blockchains need to move from facilitating five to ten transactions per second to handling hundreds of thousands of transactions per second.

Do you agree with Morehead that now is the best time to buy Bitcoin? Keep the conversation going in the comment section below.

Images courtesy of CNBC and Blockchain.info.