Pantera Capital, a prominent cryptocurrency investment firm, is considering investing $100 million in Bitwise’s spot Ethereum ETF as seed capital if the funds are approved to launch. The firm has shown interest in purchasing shares from authorized participants or broker-dealers in the market through its affiliated investment funds, but has not yet entered into a binding agreement. Pantera believes that Ethereum ETFs could attract a substantial influx of new investors who may be more interested in Ethereum’s reputation as a tech platform compared to Bitcoin’s digital gold status.
In a letter to investors, Pantera Capital’s CEO Dan Morehead and other staff discussed the potential benefits of spot Ethereum ETFs, highlighting the asset as a strong catchup trade candidate that could see surprising upside due to low expectations around flows. The firm also addressed the possibility of significant outflows once Grayscale’s ETHE fund begins trading as an ETF, but suggested that the outflows may be less material than what was experienced with early Grayscale GBTC outflows.
Pantera pointed out that the approval of spot ETH ETFs could have broader knock-on effects, including market growth and diversification benefits. It believes that increased attention on Ethereum may spill over to other protocols, leading to greater integration with mainstream financial products and making blockchain just another asset class alongside existing securities handled by registered investment advisors. The firm also mentioned the potential for spot ETFs for other crypto tokens in the future, with executives at JP Morgan, Bernstein, and Cboe expressing optimism for the possibility.
Overall, Pantera Capital’s interest in investing in Bitwise’s spot Ethereum ETF signals a growing interest in the cryptocurrency market, particularly in assets like Ethereum that are seen as technology platforms. The firm’s optimistic view on Ethereum ETFs reflects a belief in the asset’s potential for growth and diversification, as well as the broader implications that ETF approvals could have on the cryptocurrency market as a whole.
