Pantera Capital is interested in investing $100 million in seed capital into the Bitwise spot Ethereum (ETH) ETF once the fund is approved for launch.
Bitwise’s June 18 S-1 amendment states that Pantera has “expressed interest” in purchasing the stock. Pantera purchases shares from authorized market participants or broker-dealers through at least one affiliated investment fund.
If Pantera or its affiliates make a purchase pursuant to an expression of interest, they will not be able to sell those shares through an open market sale for six months. However, shares may be disposed of in a repurchase transaction with an authorized participant.
Pantera has not entered into a binding contract or committed to purchase. You could invest more than $100 million or nothing at all.
Pantera is bullish on the Ethereum ETF.
in June 18th Pantera Capital CEO Dan Morehead and other staff wrote in a letter to investors that a spot Ethereum ETF could attract “a significant influx of new investors” who were previously excluded for compliance reasons or brokerage account restrictions.
The company believes that some investors may be more interested in and better understand Ethereum’s reputation as a “technology platform” compared to Bitcoin’s status as “digital gold.”
The company also acknowledged claims that Ethereum has underperformed over the past year and a half, making the asset a “strong catch-up trading candidate.”
Pantera added that the ETF could have “surprising upside” due to low expectations for flows, but acknowledged the potential for significant outflows.
The company noted that Grayscale’s ETHE fund could experience outflows once it begins trading as an ETF. However, due to the lower number of forced sellers, the outflow may be “less significant” than the initial grayscale GBTC outflow.
Pantera named Three Arrow Capital (3AC) and Genesis, which went bankrupt in 2022 and 2023, respectively, as forced sellers who must sell GBTC holdings.
chain effect
Finally, Pantera said approval of a spot ETH ETF could have broader “knock-on effects,” including market growth and diversification benefits. According to the company:
“As investors explore Ethereum as a technology platform, growing interest in ETH could spread to the wider world of the protocol.”
Approval of ETH could lead to greater integration with mainstream financial products, making blockchain “a simple asset class” alongside the thousands of existing securities handled by registered investment advisors (RIAs), he added.
Pantera also suggested that the recent approval could lead to ETFs for other cryptocurrency tokens in-kind. Executives from JP Morgan, Bernstein, and Cboe similarly expressed varying levels of optimism while discussing the potential for other cryptocurrency ETFs.