Venture Fund III Closing June 30 :: Pantera Blockchain Letter, June 2018

Dear Community,

The first Venture Fund III closing will be June 30th.

We know that our LPs are often primarily motivated by the desire to learn about this very disruptive new technology. We have continued our tradition of offering a Co-Investment Class. Investors who commit $5mm or more will have co-investment rights to at least 10% of every deal.

It is likely that at some point the first two funds will have fully invested their follow-on reserves. At that point the pro rata rights of the two previous funds will be granted to Venture Fund III.

Investors in the first closing will get the original cost basis of all deals. Investors in the subsequent close will pay an 8% preferred rate on the called capital and would come in at higher valuations on any deals which raise again or have exits before the final close.

Investors in the June Co-Investment Class will have the opportunity to co-invest in the deals we do between July and the final closing (sometime around the end of the year).

If you are interested in the fund, please contact our Investor Relations team at or 650–854–7000.


Pantera portfolio companies have led the wave of acquisitions occurring this year in the blockchain space. Eight of our companies have exited or paid significant dividends. Our first two venture funds have realized $100 million on investments of $13.6 million.

The majority of invested capital is still at work.


Blockchain is global. We must look outside the three counties of Silicon Valley for compelling deals.

Pantera’s pursuit of the most groundbreaking innovations in blockchain has taken our investment team to 30 countries, across six continents.

In each country we dig deep with the blockchain companies, protocol projects, venture capitalists, and knowledgeable investors to get a sense of the local opportunity. That has led to some of our best investments. 30% of Pantera’s projects are outside of the U.S., including many of our most notable projects.


Working to support the community for over five years has put us in a unique position. We are often the largest — and sometimes only — investor in important deals.

Some examples of publicly-announced deals:

  • We are the only U.S. investor in OmiseGO (up 1,918% since our investment). We built that relationship in Thailand years ago — well before any thought of a token.
  • Pantera is the largest U.S. investor in ICON (up 2,493% since our investment).
  • We are the only investor in Bitstamp.
  • We were the first phone call and largest investor in Kin/Kik.
  • We read the 0x whitepaper before the project even had a name.
  • Pantera is the first institutional investor, with the highest discount, in Enigma.
  • We were the largest and, for a while, only investor in Origin.
  • Panteras is the only U.S. fund in Kyber.
  • We are the largest investor in StarkWare, Giftos, Bloom, FunFair, and Kik/Kin. Pantera is also believed to have been the largest investor in:


From its humble beginnings in 2013 with a few hundred people in a threadbare hotel near the Garden, the NYC blockchain conference has more than doubled in size each year. Consensus 2018 had more than 7,000 registered attendees vs est. 2,750 last year — and thousands more in satellite conferences which though called NYC Blockchain Week actually expanded to about ten days.

At Consensus there was a lot of talk about — and from — Bitcoin Maximalists.

This thought kept occurring to me:

The line “I’m a Bitcoin maximalist.”

Isn’t that the same as saying in the 1990’s “I’m a Yahoo! Maximalist”?

Yahoo! was a great company, but there was more than one disruptive idea in the Internet 1.0 wave. There could be more than one disruptive blockchain.



Many investors have asked my views on Warren Buffett’s recent “bitcoin is rat poison” repetition.

Bitcoin is “probably rat poison,” said to CNBC’s Becky Quick, May 2018

My thoughts, in no particular order:

  • Great line…catchy, pithy…he’s a true salesman.
  • Warren Buffett is obviously an incredibly successful value investor.
  • But even the best investors don’t bat 1000.
  • He might be just plain wrong — and when trades are 50-to-1 the cost of missing it is large. He’s been slagging off bitcoin since $200 /BTC.

“It’s [Bitcoin] a mirage, basically. It’s a method of transmitting money…The idea that it has some huge intrinsic value is just a joke in my view”, March 2014

  • However, he might be talking his book. I love this tweet:

Just sayin’ — If I were long 74 BILLION-dollars-worth of payments oligopolists, I’d be worried about bitcoin too.

To keep things in perspective: Buffett avoided the dot coms, but he also missed Amazon, Facebook, Google, Netflix, et al.

The three technology stocks he’s bought have all been well after they were successful, which meant missing the vast majority of the trade. For example, Buffett missed buying Apple below 50 cents a share and finally bought it thirty-six YEARS after its IPO.

If Berkshire buys bitcoin as quickly as Apple — it will be in 2045. Buckle in.


Melissa: It’s always great to see you. So where do we stand right now? A lot of people are pointing to institutional investors entering the space as the next big catalyst. Has that come? Have there been enough solutions for institutional investors when it comes to custodial problems and also just the willingness of institutions to invest this way?

Dan: Yes, I think that there’s an image out there that there’s an ON/OFF switch and it’s OFF now, and we’re going to flick it ON some particular date and the institutions will pile in. Pantera has had institutional investors since 2013. Obviously risk and reward go together. A couple of years ago there was a lot of risk, but there was a lot of reward. And we have yet to get to the point where we have an SEC-regulated custodian, which is the one silver bullet everyone’s waiting for. Many institutions are essentially buying the rumor and selling the fact, getting invested now so that in three, four, five months, when the institutional-quality SEC-regulated custodians that we’re hearing about come online, they’ll already have their positions.

Melissa: Have you been actively trading around bitcoin positions? What do you, where do you see the value here in terms of the price level?

Dan: In our view, all cryptocurrencies are very cheap right now; they’re down 65% from their highs. At the highs, everybody wanted to get invested.

Melissa: At the highs were they too expensive?

Dan: Obviously in hindsight. Right now, they’re down about 65%. Much cheaper to buy now and participate in the rally as it goes. There is a good technical indicator that we look at. When bitcoin breaks through its 200-day moving average, if you buy that day, and sell a year later, you make an average of 239%. Obviously that’s a very simple strategy.

Melissa: So let’s go through that again. Once Bitcoin breaks its 200-day moving average you buy and then one year later-

Dan: Sell it one year later. It’s happened about five times in the past six years. Once it hits that, if you just buy it and sell without even thinking a year later, you have made 239%. That’s the essence of this trade, it rarely ever gets cheap to its long term average. So today is a good day to be buying.

Melissa: How many coins do you own overall and what’s your favorite coin right now in terms of, I don’t know, return from this point to a year from now?

Dan: We own about 35 pre-auction ICOs and we also own about 25 of the liquid blockchains like XRP, ether, and bitcoin. We’re always trading those around, because there’s great relative value opportunities. Our Digital Asset Fund is actually up, even though bitcoin is down a ton since December.

And I think the most exciting thing in the space is Augur. Augur’s going to go live with its prediction market on July 9th and it will be the first big thing working on Ethereum. I think it’s going to really get people excited. So Augur REP is probably the most interesting currency right now.

Brian Kelly: So Dan, actually I want to ask you a little bit about Augur then, because we saw with CryptoKitties, that broke Ethereum. Ethereum has yet to scale, we’re talking end-of-the-year scaling. How is Augur going to work on top of ethereum if it can’t scale?

Dan: I would say it didn’t break Ethereum. It just grounded it down for a few days, it slowed it down.

Brian Kelly: Right.

Dan: But I think all those projects are great to show what can happen, and obviously they do need to scale. Bitcoin, Ethereum, do five to ten transactions per second, they need to get to 100s or 1000s. And Augur’s going to prompt that to begin happening. It’s not going to be great for initially day-trading super active things. It’s going to be better for making bets on things like sports events or things that happen a few days hence. It’s not like day-trading Apple stock.

Melissa: Has a legalization of sports gambling changed your view on Augur, is there a place or more of a place now that the Supreme Court has ruled that you can have legal sports gambling?

Dan: Sure. So there’s another exciting project, FunFair, that’s just gone to Mainnet and it’s actually the first online legal gambling site that’s been launched. And there again, I think it’s another really-exciting opportunity to actually see people using cryptocurrencies to do something. Beyond CryptoKitties, which was a really cute little concept.

Melissa: Do you have a CryptoKitty?

Dan: I don’t.

Melissa: You don’t? Oh wow, I was fully expecting you to say you have like a half dozen or something.

Dan: I’m basically short a CryptoKitty.

Melissa: Dan, it’s always good to see you, hope you’ll come back soon.

For those interested in the full interview, here’s the CNBC Fast Money interview: CNBC


Maria: Welcome back. More bitcoin buzz. Big names from Jack Dorsey to Snoop Dogg descending on New York City this week for the Consensus Conference to tout the benefits of crypto currency and blockchain.

It’s called Blockchain Week. Concerns about security and safety of digital currency of course, still loom large over the sector. The Securities and Exchange Commission launching a fake website about initial coin offerings to warn investors about the risk.

Joining me right now is Pantera Capital, Founder and CEO Dan Morehead. And Dan it’s great to see you. Thanks for joining us.

You’ve been among the first believers in blockchain and bitcoin. Your Digital Asset Fund outperformed bitcoin in April. Tell us about the fund.

Dan: The Fund is buying not just bitcoin but all the liquid currencies. There’re about 60 in our investible universe. The Fund goes long and occasionally short based on their value and performance.

Maria: How’s it going?

Dan: Since December 1st, bitcoin’s down and the fund’s up 45%.

Co-Host: Is that because some of the other components of the index, if you will, are up?

Dan: Yeah.

Co-Host: Or is that just your hedging strategy?

Dan: That’s the whole point. There’s lots of different currencies. It’s not just bitcoin, and if you buy them when they’re relatively cheap and sell them when they’re relatively rich, you can make money even in a bear market.

Co-Host: So outside of bitcoin, because that’s the one everyone is talking about, which company should we be looking at cryptocurrencies should people take a look at closer?

Dan: I think the main point should be, you set up a huge portfolio. It’s like the IPO boom in the 90’s. There’s a lot of very interesting things. You should own some of the cryptocurrencies themselves, like bitcoin, ethereum, zcash, investing in a big basket of ICOs is probably smart and also venture companies that are using a blockchain to help clients do something better, faster, cheaper.

Maria: Dan, thank you. Dan Morehead.

For those interested in the full interview, here’s the Fox Mornings with Maria interview: Fox


Pantera partners will be traveling over the next months to discuss Venture Fund III and the blockchain disruption. We have organized group lunches in many cities, should you want to meet other investors who share your interest in blockchain. If you are interested in attending one of our group lunches, please fill out the form on this page and we will be in touch regarding availability.

Some of our dates include:

  • Washington DC, June 21 | including a Group Lunch at 12pm
  • Berlin, June 29
  • New York, June 25-July 3
  • Newport, RI, July 16–18
  • Berkeley, July 18 | Group Lunch at 12pm
  • Washington DC, July 19
  • Houston, July 20
  • London, July 26| Group Lunch at 12pm
  • Luxembourg, July 27
  • New York, July 30-August 3
  • August 1, Group Lunch | 12pm
  • Southampton, August 17 | Group Lunch at 12pm
  • New York, August 20–24
  • San Francisco, August 28 | Group Lunch at 12pm
  • Chicago, September 12–13 | September 12, Group Lunch | 12pm
  • Seattle, September 13–14 | September 13, Group Lunch | 12pm
  • Hong Kong, September 17–20
  • Boston, September 17 | Group Lunch at 12pm
  • Durham, NC, September 17 | Group Lunch at 12pm
  • New Haven and Greenwich, September 18
  • New York, September 19–21 | September 20 | Group Lunch 12pm
  • Orange County, CA, September 25–28 | September 25 | Group Lunch 12pm

If you are interested in a meeting, please contact Pantera’s Investor Relations team at 650–854–7000 or

The future has arrived,


“Put the alternative back in Alternatives”





Pantera is actively hiring for the following roles:

· Data Scientists

· Engineers

· Executive Assistants

· Data Entry

· Investor Relations Associates

If you have a passion for blockchain and want to work in Menlo Park, San Francisco, or New York, please follow this link to apply.


Some good material to start with on the development of blockchain technology and cryptocurrencies as speculative instruments:

· Bitcoin: A Peer-to-Peer Electronic Cash System — white paper by Satoshi Nakamoto

· 12 Graphs that Show Just How Early the Cryptocurrency Market Is by Chris McCann

· Blockchain Investments and the New Problem Asset for Conventional VCs by Jake Brukhman

· Cryptoeconomics 101 by Nick Tomaino, and his Tokens, Tokens and More Tokens

· Fat Protocols by Joel Monegro

· What Does $300 Ether Mean? by Vinay Gupta

· Token Economy by Stefano Bernardi and Yannick Roux

· Traditional Asset Tokenization

· The Rise of the Token Sale by Max Mersch

· Making Sense of Cryptoeconomics by Max Mersch

· Why Amazon’s Margin Is Filecoin’s Opportunity Forbes, Aug 28, 2017

· Joey Krug RealVision Interview Excerpts: ICOs, Future of Digital Currency, Ethereum Flash Crash RealVision, Aug 10, 2017

· Pantera Capital to Raise $100 Million in Investment for ICO Hedge Fund Coindesk, Jun 28, 2017

· While Investment Firms Ponder ICOs, This Team is Barreling Ahead with a $100 million ICO Fund TechCrunch, Jun 28, 2017

· Balaji CNBC Interview CNBC

· US Fed Hints at Blockchain Integration Coindesk

· Coindesk State of Blockchain Q2 Report Coindesk

· The Isle of Man Welcomes ICOs Coindesk

· Ethereum Metropolis Release Testnet To Launch Coindesk

· Closure Steps for Chinese Exchanges Coindesk

· China Shmyna, Bitcoin Trading is Way More Distributed Now Anyway Coindesk

· Lawmakers Seek Tax Exemption on BTC Transactions Under $600 Coindesk

· ICO “Rounds” Are Coming TechCrunch

· Crypto Regulation? Not Anytime Soon, Says White House Official Coindesk

Two of the best books are Digital Gold by Nathaniel Popper for a fun high-level history and an in-depth technically-minded look Mastering Bitcoin and Mastering Ethereum by Andreas Antonopoulos.

And some additional information on the ICO model specifically:

· Recommended Primer: Token Mania

· Kin Whitepaper

· Kin Webpage

· AVC Venture Capital on Kin

· Tech Crunch Article on Kin

· Reuters Article on Kin

· Video on Kin by AVC

· USV on Protocol Value

· Tokenomics — A Business Guide to Token Usage, Utility, and Value by William Mougayar

· Earn’s CEO on Token Economies

· Basic Attention Token Whitepaper

· Basic Attention Token Webpage

· Nick Szabo and Naval Ravikant on Tokens

Additional information on blockchain regulation:

· SEC’s Office of Investor Education and Advocacy Investor Bulletin on ICOs

· SEC Issued Statement on ICOs and the DAO

· China Banned ICOs

· FINMA Issues Stricter ICO / AML Regulatory Compliance Requirements

· SEC Puts Task-Force on ICOs

· SEC Shuts Down Protostarr

· South Korea Bans ICOs


We tweet blockchain news and insights on Twitter and Medium at @PanteraCapital, @Dan_Pantera, @JoeyKrug, and @Veradittakit.

You can subscribe to our publications by visiting Pantera’s website or by e-mailing

· Blockchain Letter: a monthly letter with our thoughts on significant market and ecosystem-related developments. Also, includes our thoughts on blockchain venture capital and news on our portfolio companies for accredited investors.

· Blockchain Investor Letter: Public Letter plus exclusive information for accredited investors.

· White Papers: periodic, original blockchain research and academic papers.