Pantera Capital is fascinated by probably investing $100 million in Bitwise‘s spot Ethereum (ETH) ETF as seed capital if the funds are permitted to launch.
Bitwise’s June 18 S-1 modification states that Pantera has “indicated an curiosity” in buying shares. Pantera would buy the shares from approved contributors or broker-dealers available in the market by way of a minimum of one among its affiliated funding funds.
If Pantera or its associates proceed with the acquisition below the indication of curiosity, they can’t promote the shares in an open-market sale for six months. Nevertheless, they will get rid of the shares in a redemption transaction with approved contributors.
Pantera has not entered a binding settlement or dedicated to a purchase order. It might make investments kind of than $100 million or nothing in any respect.
Pantera optimistic on Ethereum ETF
In a June 18 letter to buyers, Pantera Capital CEO Dan Morehead and different employees wrote that spot Ethereum ETFs might entice “a considerable inflow of latest buyers” beforehand excluded resulting from compliance causes or brokerage account limitations.
The agency believes that some buyers could also be extra fascinated by and higher in a position to comprehend Ethereum’s popularity as a “tech platform” in comparison with Bitcoin’s standing as “digital gold.”
The agency additionally acknowledged arguments that Ethereum has underperformed over the previous yr and a half, which might make the asset a “robust catchup commerce candidate.”
Pantera added that the ETFs might carry a “shocking upside” resulting from low expectations round flows however acknowledged the potential for vital outflows.
The agency famous that Grayscale’s ETHE fund might see outflows when it begins buying and selling as an ETF. Nevertheless, the outflows could possibly be “much less materials” than early Grayscale GBTC outflows resulting from fewer compelled sellers.
Pantera named Three Arrows Capital (3AC) and Genesis, which entered chapter in 2022 and 2023, respectively, as compelled sellers who needed to offload their GBTC holdings.
Knock-on results
Lastly, Pantera stated spot ETH ETF approvals might have broader “knock-on results,” together with market development and diversification advantages. In accordance with the agency:
“Elevated consideration on ETH might spill over to the broader universe of protocols as buyers discover Ethereum as a expertise platform.”
It added that ETH approvals might result in better integration with mainstream monetary merchandise, making blockchain “simply one other asset class” alongside 1000’s of different present securities dealt with by registered funding advisors (RIA).
Pantera additionally instructed that the most recent approvals might result in spot ETFs for different crypto tokens. Executives at JP Morgan, Bernstein, and Cboe have equally mentioned the potential for different crypto ETFs, expressing various ranges of optimism.
