Blockchain Investment Fund Pantera Capital Raises $71 Million for Crypto Venture Fund

Francisco Memoria
  • Blockchain investment firm Pantera Capital is reportedly looking ot raise $175 million for a crypto venture fund.
  • It already raised $71 million from 90 investors, and is set to invest in the ICE-owned company Bakkt.

Blockchain investment firm Pantera Capital is reportedly looking to raise a total of $175 million from a cryptocurrency investment venture called Venture Fund III. The fund has already raised over $71 million from 90 investors.

According to TechCrunch, raising $175 million is an enormous jump from its previous venture fund, in which it raised $25 million. In its first venture fund, closed in 2013, Pantera raised $13 million.

Paul Veradittakit, a partner with the firm, noted the amount Pantera is looking to raise is a “function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds.”

Through a blog post, Pantera Capital revealed its Venture Fund III has already found its first investment: Bakkt, the company the Intercontinental Exchange (ICE), owner of the New York Stock Exchange, launched in a partnership with tech giant Microsoft and coffeehouse chain Starbucks.

The investment fund’s CEO, Dan Morehead, has earlier this month stated investors should be focused on Bakkt, and not on bitcoin ETF rejections, referring to Securities and Exchange Commission’s (SEC) rejection of the Winklevoss twins’ bitcoin ETF.

Morehead has in the past made a very bullish bitcoin price prediction, as he stated the flagship cryptocurrency is going to reach $67,500 by the end of 2019. At press time, the cryptocurrency is trading at $6,400.

Pantera Capital’s Hedge Funds

Pantera Capital, founded in 2013, has been juggling various investment strategies. Per TechCrunch, it manages its venture funds, structured like traditional venture funds, along with three hedge funds: an ICO-focused fund, a Bitcoin-focused fund, and an altcoin-focused fund.

Its ICO fund reportedly focuses on token pre-sales, so the investment firm can get a discount by “getting in early, when it’s just a team and a white paper.” Its BTC fund, which has attracted various investors after being launched five years ago, has seen a lifetime return of over 10,000%.

The firm’s altcoin-focused fund invests in cryptocurrencies already listed on crypto exchanges through an approach that “includes machine learning.” As CryptoGlobe covered Pantera Capital was affected by the crypto market’s bearish trend, so much so that as of June it was down by 51%, after underperforming bitcoin in May.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.