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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 licensed individuals or broker-dealers out there by means of a minimum of one in every of its affiliated funding funds.
If Pantera or its associates proceed with the acquisition underneath 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 licensed individuals.
Pantera has not entered a binding settlement or dedicated to a purchase order. It may 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 workers wrote that spot Ethereum ETFs may entice “a considerable inflow of recent buyers” beforehand excluded attributable to compliance causes or brokerage account limitations.
The agency believes that some buyers could also be extra fascinated by and higher capable of comprehend Ethereum’s repute 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 “robust catchup commerce candidate.”
Pantera added that the ETFs may carry a “stunning upside” attributable to low expectations round flows however acknowledged the potential of vital outflows.
The agency famous that Grayscale’s ETHE fund may see outflows when it begins buying and selling as an ETF. Nevertheless, the outflows might be “much less materials” than early Grayscale GBTC outflows attributable to 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 may have broader “knock-on results,” together with market development and diversification advantages. In line with the agency:
“Elevated consideration on ETH could spill over to the broader universe of protocols as buyers discover Ethereum as a know-how platform.”
It added that ETH approvals may result in larger 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 steered that the most recent approvals may result in spot ETFs for different crypto tokens. Executives at JP Morgan, Bernstein, and Cboe have equally mentioned the potential of different crypto ETFs, expressing various ranges of optimism.