The cryptocurrency venture capital firm Pantera Capital has invested $300 million in companies that hold cryptocurrency treasuries, predicting that their returns will outperform cryptocurrency exchange-traded funds (ETFs).
Pantera's general partners Cosmo Jiang and content director Erik Lowe stated on Tuesday that digital asset treasuries (DAT) "can generate returns to grow net asset value per share, holding more underlying tokens over time than simply holding spot."
They added, "Therefore, owning DAT may offer higher return potential than directly holding tokens or holding through ETFs."
Pantera has deployed over $300 million to cryptocurrency treasury companies located in the United States, the United Kingdom, and Israel, which hold a variety of tokens including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and several other altcoins.
Jiang and Lowe said, "These DATs are leveraging their unique situations to adopt strategies that grow their digital asset holdings in a way that adds value per share."
The so-called cryptocurrency treasury companies are the hottest trend on Wall Street, having raised billions from investors, with stock prices soaring. However, some warn that the market has become crowded, and many companies may fail.
BitMine Immersion Technologies, an Ethereum treasury company chaired by Tom Lee, is Pantera's first investment in the DAT fund because it "embodies a company with a clear strategic roadmap and execution leadership."
In just two and a half months, BitMine has become the largest Ethereum treasury company, holding the third-largest cryptocurrency holdings among publicly listed companies globally.
The company holds nearly 1.2 million ETH, valued at approximately $5.3 billion, with a goal of acquiring 5% of the total supply of the token.
The company's model increases the number of tokens per share by issuing stock at a premium to net asset value (NAV), monetizing volatility using convertible bonds, and generating staking rewards and decentralized finance yields.
Pantera stated that BitMine's ability to sustainably execute its strategy "will become evident over time," but it has already attracted support from heavyweight figures in traditional finance, including Stan Druckenmiller, Bill Miller, and ARK Invest.
Since the company began its ETH purchasing strategy at the end of June, BitMine (BMNR) shares have risen over 1300%. During the same period, Ethereum has increased by nearly 90%.
Pantera said, "We expect the growth story of the highest quality DATs to gain recognition from more institutional investors, just as Strategy has experienced."
Not everyone believes that cryptocurrency treasury companies are destined for success.
Earlier this month, Ethereum co-founder Vitalik Buterin warned that mismanagement and excessive leverage could lead to their collapse.
Vance Spencer, co-founder of Framework Venture, stated on Tuesday that most of the ETH acquired by treasury companies "will be put into on-chain lending markets, attracting stablecoins for circulation or mining."
Standard Chartered analysts warned in June that if Bitcoin prices fall significantly, a new wave of Bitcoin treasury companies could face the risk of losses.
Related: The Bitcoin (BTC) corporate treasury craze raises concerns about "Knoxville" nationalization.
Original article: “Pantera Invests $300 Million in Cryptocurrency Treasury Firms, Claims Yields May Exceed ETFs”
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