Pantera Capital is thinking about probably investing $100 million in Bitwise‘s spot Ethereum (ETH) ETF as seed capital if the funds are approved to launch.
Bitwise’s June 18 S-1 modification states that Pantera has “indicated an interest” in buying shares. Pantera would buy the shares from approved contributors or broker-dealers out there by means of at the least one among its affiliated funding funds.
If Pantera or its associates proceed with the acquisition beneath the indication of curiosity, they can’t promote the shares in an open-market sale for six months. Nevertheless, they’ll eliminate the shares in a redemption transaction with approved contributors.
Pantera has not entered a binding settlement or dedicated to a purchase order. It may 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 may appeal to “a substantial influx of new investors” beforehand excluded on account of compliance causes or brokerage account limitations.
The agency believes that some traders could also be extra thinking about and higher capable of 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 12 months and a half, which may make the asset a “strong catchup trade candidate.”
Pantera added that the ETFs may carry a “surprising upside” on account of low expectations round flows however acknowledged the opportunity of important outflows.
The agency famous that Grayscale’s ETHE fund may see outflows when it begins buying and selling as an ETF. Nevertheless, the outflows could possibly be “less material” than early Grayscale GBTC outflows on account of 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 may have broader “knock-on effects,” together with market progress and diversification advantages. In keeping with the agency:
“Increased attention on ETH may spill over to the broader universe of protocols as investors explore Ethereum as a technology platform.”
It added that ETH approvals may result in higher integration with mainstream monetary merchandise, making blockchain “just another asset class” alongside hundreds of different current securities dealt with by registered funding advisors (RIA).
Pantera additionally prompt that the newest approvals may 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.
