Pantera Capital invested $300 million in companies with cryptocurrency reserves, expecting returns higher than #etf . The venture fund believes that such firms can generate profits to increase net asset value per share.

Pantera's general partner Cosmo Jiang and top manager Erik Lowe stated on Tuesday that companies with digital assets on their balance sheets 'are capable of generating income that increases net asset value per share and allows accumulating more base tokens over time than with ordinary asset holding.'

According to them, owning shares in such companies may offer a higher potential return compared to simply holding tokens or through ETFs.

Pantera has invested over $300 million in American, British, and Israeli companies that hold various tokens on their balance sheets — Bitcoin $BTC , Ethereum $ETH , Solana $SOL , and a number of other altcoins.

BitMine as a model example

BitMine Immersion Technologies, with Ethereum reserves and chaired by Tom Lee, became the first investment from the Pantera DAT Fund. The company 'represents an example of a firm with a clear strategic roadmap and guidance for its execution.'

In two and a half months, BitMine has become the largest company holding Ethereum and boasts the third largest cryptocurrency reserves among public companies in the world. It holds nearly 1.2 million ETH worth approximately $5.3 billion and aims to acquire 5% of the total token supply.

The company's model increases the number of tokens per share through the issuance of shares at a premium to net asset value, the use of convertible bonds to monetize volatility, and generating rewards for staking and yield in decentralized finance.

Results in numbers

BitMine shares (BMNR) have increased by more than 1,300% since the launch of the ETH buying strategy at the end of June. During the same period, Ethereum has risen nearly 90%.

Pantera noted that BitMine has already attracted the attention and support of institutional heavyweights in traditional finance, including Stan Druckenmiller, Bill Miller, and ARK Invest.

The fund expects that 'the growth story of high-quality companies with cryptocurrency reserves will be appreciated by a greater number of institutional investors.'

Criticism and risks

Not everyone agrees that companies with cryptocurrency reserves are doomed to succeed. At the beginning of the month, Ethereum co-founder Vitalik Buterin warned that excessive use of leverage could lead to the collapse of such companies under irresponsible management.

Analysts at Standard Chartered warned in June that a new wave of companies with Bitcoin reserves could be at risk due to potential losses from a sharp drop in Bitcoin prices.