Pantera Capital is excited about probably 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 a minimum of certainly one 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’ll eliminate 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 workers wrote that spot Ethereum ETFs might appeal to “a considerable inflow of recent traders” beforehand excluded as a result of compliance causes or brokerage account limitations.
The agency believes that some traders could also be extra excited about and higher in a position to 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 yr and a half, which might make the asset a “robust catchup commerce candidate.”
Pantera added that the ETFs might carry a “shocking upside” as a result of low expectations round flows however acknowledged the potential of vital outflows.
The agency famous that Grayscale’s ETHE fund might see outflows when it begins buying and selling as an ETF. Nevertheless, the outflows could possibly be “much less materials” than early Grayscale GBTC outflows as a result of fewer pressured sellers.
Pantera named Three Arrows Capital (3AC) and Genesis, which entered chapter in 2022 and 2023, respectively, as pressured 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 accordance 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 1000’s of different current securities dealt with by registered funding advisors (RIA).
Pantera additionally advised that the newest approvals might 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.
