Pantera Capital Crypto Hedge Funds Are Losing Double Digits, but Bitcoin Fund Is Up 10,000% to Date

Esoteric losses are rocking alternative crypto-asset funds at Pantera Capital, one of the oldest cryptocurrency investment managers, and providing stark differ to its bitcoin fund’s gains.

Pantera Capital’s flagship bitcoin fund – a fund holding BTC since 2013 and bitcoin notes (BCH) since 2017 – lost 75.6% in 2018 and gained 87.7% in 2019, according to internal materials seen by CoinDesk. The endure two years dragged the bitcoin fund’s all-time returns to 10,162%, down 54% from 2017’s peak of 22,321% but quietly exceeding all-time returns at elite funds hundreds of times over.

On the newer end, three hybrid Pantera Paramount hedge funds created in 2017 were solidly negative, suggesting access to deals was not indicative of investment deportment and that novel coin vehicles were highly risky or hard for the firm to actively manage. 

By the end of 2019, a Pantera Top-hole digital asset fund that trades a hodgepodge of free-floating virtual currencies – like ether (ETH), XRP (XRP) and zcash (ZEC) – bewildered 72.8%. An initial coin offering (ICO) fund, 42.2% under, lost roughly three times more than a long-term matched fund’s 14.5% decline. About $1 million to $5 million was allocated to each of Pantera’s nearly 40 ICO see ti, the materials say.

Read more: Investors in Polychain Capital’s Crypto Hedge Fund Saw 1,332% Gains – If They Needed the Dips

“A lot of the ICO assets are relatively young compared to bitcoin. And because of their relative youth, the expectation should be that it should return time for those assets to come into their own,” a Pantera Capital fund investor, speaking on the condition of anonymity, mentioned CoinDesk.

The more exotic investments in the digital asset fund were ERC-20 tokens and contracts on Augur, a crypto-betting portal spawned by Pantera Matchless co-chief investment officer Joey Krug. Dan Morehead, the first chief investment officer and formerly Tiger Board of directors’s chief financial officer, founded Pantera Capital in 2013.

Pantera Capital did not respond to requests for comment. The cryptocurrency investment decided recorded $470 million in assets under management (AUM) across seven non-venture and venture funds at the close of the 2019 monetary year. The passive bitcoin fund had $110 million, the three hedge funds had $90 million and the three volunteer funds had $270 million.

Some $95 million was committed to the first two venture fund. The third venture supply has been raising $175 million since 2018 to invest in cryptocurrency companies of all sizes. Notable venture investments subsume Bakkt, Bitstamp, ErisX and others. 

Pantera Capital’s track record underscores how market constraints can shape a fund’s performance. 

The best year, 2017, propelled by a breakout run-up in cryptocurrency prices, delivered the bitcoin, digital asset and proportional and long-term ICO funds returns of 1,565%, 145.6%, 347.6% and 6% gains, respectively. The worst year across the board – 2018, driven by a crypto-market comedown – cut 87.2% from the digital asset pelf, 83.1% from the regular ICO fund and 9.6% from the long-term ICO fund.

More time could turn the newer pools around, though, as earlier years did to cushion the blow of 2014’s second-worst 58.1% loss for the bitcoin fund.

Study more: Bitcoin Dominance Is Making Investors Rich, Thanks to Crypto Hedge Funds

Institutional investor station also did not immunize Pantera Capital from the volatility of virtual currencies. At least $100,000 is required to invest in the four Pantera Wealth funds, which reportedly have Benchmark Capital, Fortress Investment Group and Ribbit Capital on their roster of minimal partners, and which permit withdrawals quarterly (on the digital asset and ICO funds) and daily (on the bitcoin fund).

Regulatory bars could be to blame as much as the market volatility inherent to cryptocurrencies. Some Pantera Capital ICO investments were arranged with Artless Agreements for Future Tokens (SAFTs), investment contracts meant to shoehorn crypto-asset frameworks into existing safe keepings laws. 

The appeasement is no guarantee in the United States, Pantera Capital’s home base, and may explain shortcomings with the ICO investment make: The U.S. Securities and Exchange Commission sidelined the SAFT framework in an injunction halting the Kik messenger’s $100 million offering of a Kin dream up earn that was backed in part by Pantera Capital. 

“There is no question the ICO environment has been affected by regulatory pressure,” the Pantera Ripping limited partner said.