Pantera Capital, a venture capital firm, has invested $300 million in companies managing crypto treasuries, expecting their yields to outperform crypto ETFs.
Pantera Capital's Investment in Crypto Treasuries
Pantera Capital, according to general partner Cosmo Jiang and content head Erik Lowe, believes that digital asset treasuries can yield greater returns than holding tokens directly or through ETFs. They stated that treasuries can "generate yield to grow net asset value per share, resulting in more underlying token ownership over time." Pantera has deployed over $300 million into firms based in the US, UK, and Israel that manage various tokens.
BitMine as a Successful Example of Crypto Treasury
The first investment from the Pantera DAT Fund was BitMine Immersion Technologies, which has rapidly become the largest Ether treasury company. BitMine holds almost 1.2 million ETH worth around $5.3 billion. This company has captured significant attention from major investors through its strategy, which involves issuing stock at a premium to net asset value and generating staking rewards.
Risks Associated with Crypto Treasuries
Despite their success, the crypto treasury market has attracted criticism. Ethereum co-founder Vitalik Buterin cautioned against excessive leverage, which could pose risks to such firms. Analysts at Standard Chartered warned that new Bitcoin treasury firms could be at risk if Bitcoin's price drops sharply.
Pantera Capital's investment in crypto treasuries highlights a growing interest in this field, yet potential risks remain relevant. The forecasts about yields from such investments evoke both optimism and skepticism regarding the success of many crypto treasuries.
