Pantera Capital is fascinated with doubtlessly investing $100 million in Bitwise‘s spot Ethereum (ETH) ETF as seed capital if the funds are authorized 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 licensed individuals or broker-dealers out there by way of not less than one in all its affiliated funding funds.
If Pantera or its associates proceed with the acquisition below the indication of curiosity, they can not promote the shares in an open-market sale for six months. Nonetheless, they will get rid of the shares in a redemption transaction with licensed individuals.
Pantera has not entered a binding settlement or dedicated to a purchase order. It might make investments roughly than $100 million or nothing in any respect.
Pantera optimistic on Ethereum ETF
In a June 18 letter to traders, Pantera Capital CEO Dan Morehead and different employees wrote that spot Ethereum ETFs might appeal to “a considerable inflow of latest traders” beforehand excluded resulting from compliance causes or brokerage account limitations.
The agency believes that some traders could also be extra fascinated with and higher capable of comprehend Ethereum’s status 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 “sturdy catchup commerce candidate.”
Pantera added that the ETFs might carry a “shocking upside” resulting from low expectations round flows however acknowledged the opportunity of important outflows.
The agency famous that Grayscale’s ETHE fund might see outflows when it begins buying and selling as an ETF. Nonetheless, the outflows may very well 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 mentioned spot ETH ETF approvals might have broader “knock-on results,” together with market development and diversification advantages. In keeping with the agency:
“Elevated consideration on ETH might spill over to the broader universe of protocols as traders discover Ethereum as a know-how platform.”
It added that ETH approvals might result in better integration with mainstream monetary merchandise, making blockchain “simply one other asset class” alongside hundreds of different current 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 opportunity of different crypto ETFs, expressing various ranges of optimism.
