TLDR
- Pantera Capital has invested over $300 million in digital asset treasury (DAT) companies
- DAT companies hold large crypto reserves and aim to grow token holdings per share
- BitMine Immersion has grown ETH per share by 330% in its first month
- Pantera believes DATs may offer higher returns than holding tokens directly or through ETFs
- Pantera’s DAT portfolio spans eight tokens across companies in the US, UK, and Israel
Pantera Capital has deployed more than $300 million into digital asset treasury (DAT) companies, according to the venture capital firm’s latest blockchain letter. These companies hold cryptocurrency reserves on their balance sheets and represent a growing category of public firms in the crypto space.
The investment thesis behind Pantera’s DAT strategy is straightforward. DATs can generate yield to increase net asset value per share, resulting in more underlying token ownership over time compared to simply holding the tokens directly.
Pantera believes this approach could potentially deliver higher returns than holding tokens directly or through ETFs. The firm has raised two DAT-specific funds that have collectively brought in over $100 million.
The venture capital firm’s DAT portfolio is diverse. It spans eight tokens including Bitcoin, Ethereum, Solana, BNB, Toncoin, Hyperliquid, Sui, and Ethena.
These investments cover companies based in multiple countries. The portfolio includes firms from the United States, the United Kingdom, and Israel.
BitMine’s Rapid Growth
BitMine Immersion stands out as a model example in Pantera’s portfolio. The company has quickly become the largest Ethereum treasury and the third-largest DAT globally.
As of August 10, BitMine held approximately 1.15 million ETH worth $4.9 billion. The company’s strategy is based on the thesis that Ethereum will be a major macro trend for the next decade.
BitMine has grown its ETH per share by about 330% in just its first month. This growth rate is faster than Strategy’s (formerly MicroStrategy) early pace in Bitcoin accumulation.
The company’s share price has seen a dramatic rise. It jumped from $4.27 at the end of June to $51 in just over a month.
Pantera attributes this price increase to multiple factors. About 60% of the gain comes from ETH-per-share growth, 20% from ethereum’s price rally, and 20% from an expansion in its NAV multiple to 1.7x.
BitMine has attracted backing from traditional finance heavyweights. Investors include Stan Druckenmiller, Bill Miller, and ARK Invest.
Market Response and Potential Risks
Shares in BitMine have gained more than 1,300% since the firm started its ETH buying strategy at the end of June. During the same period, Ether itself has gained almost 90%.
Pantera compares DATs to top banks that trade above book value. The firm states that “banks seek to generate yield on their assets, and investors reward a valuation premium to those they believe can sustainably generate yield above their cost of capital.”
However, not everyone shares Pantera’s optimism about crypto treasury companies. Ethereum co-founder Vitalik Buterin has cautioned that overleveraging could lead to their downfall if not responsibly managed.
Framework Venture co-founder Vance Spencer has suggested that most of the ETH acquired by treasuries will be placed into on-chain borrow markets to draw stablecoins for additional leverage or yield farming.
Analysts at Standard Chartered have also raised concerns. In June, they warned that the new wave of Bitcoin treasury companies could be at risk if Bitcoin’s price drops sharply.
Despite these potential risks, Pantera remains confident in its DAT investment strategy. The firm expects “that the growth story of the highest quality DATs will come to be appreciated by more institutional investors.”
Pantera has not yet decided whether it will raise a third DAT fund. For now, the firm continues to monitor the performance of its existing DAT investments as this new category of crypto companies evolves.
The post Pantera Capital Invests $300 Million in Crypto Treasury Companies appeared first on Blockonomi.
Source: https://blockonomi.com/pantera-capital-invests-300-million-in-crypto-treasury-companies/