Pantera Capital, a bitcoin hedge fund launched 14 years ago by Dan Morehead, hopes to raise $100 million by the summer’s end. The fund has already garnered $35 million.
Pantera recently hired Joey Krug, co-founder of Augur, a decentralized prediction market platform that raised $5.3 million in an ICO in 2015. Krug will be co-chief investment officer of Pantera’s new ICO vehicle alongside Morehead.
Morehead told TechCrunch there is a large strategic investor he can’t name, the rest being individuals and institutions interested in exposure to the token market. Some of the investors are venture firms that have restrictions on investing directly in bitcoin or tokens. They want exposure to these new assets.
Morehead said he is not aware of any other fund focused exclusively on ICOs. He said Pantera is committed to purchasing tokens prior to the public sale, then again at the auction. All the new currencies have various attributes and different regulatory agencies to report to, including the IRS and the CFTC, Morehead said. Some regulatory agencies have ruled on cryptocurrencies and some have not.
The fund, which looks at each project on an individual basis, has already invested Ox, FunFair, Omise and Civic. The preference is for protocols where tokens are the only exposure to the network.
Morehead thinks there are 10 exchanges Pantera might use, including Bittrex, Kraken and Poloniex. The team is currently tracking 30 deals.
The most relevant experience for a prospective investment is having built an open source community on a large scale, Morehead said.
Asked if ICOs could supplant VCs, Morehead said there could be disintermediation of venture capital. He noted the web browser Brave raised $35 million in its ICO in 24 seconds.
Krug noted in a Medium blog that his activity with Pantera will be in addition to guiding Augur towards a successful release.
During Augur’s development, Krug said he has tried to stay deeply involved with the Ethereum and blockchain ecosystems. He was invited to meet with the Pantera team and learned about the new hedge fund they were setting up. He said realized that the fund — if set up by people with an intimate knowledge of the space — could provide tremendous value to the blockchain space, and to Augur.
The leading reason for startup failure is a lack of market fit, Krug said. By teaming with Pantera, he can address this issue. Augur needs solid spreads and fair prices to succeed. He noted Morehead’ role as CFO for Tiger Management makes him knowledgeable about blockchain industry trading.
In 2014, Pantera participated in Series A funding round for ChangeTip, a platform that promises to tap the potential of Social Networks as vehicles for someone to tip anyone.
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