ICO’s, or TGE’s in Europe (Token Generating Event), are all the rage and well they should be. They are a new source of financing and capital creation albeit with a lot of strings attached. Venture capital firms are being challenged and in many ways, avoided. So, what’s new? Pantera Capital is looking to raise $100M for a hedge fund that will invest in tokens of other firms that did an ICO. Brave new world and good luck.
“The $600m market for initial coin offerings may soon be set to expand.
Announced today, investment firm Pantera Capital is launching a new hedge fund focused on investments solely in tokens that power public blockchain protocols.
Called Pantera ICO Fund LP, the fund intends to raise $100m, with $35m already raised in support from the firm’s existing investor base, undisclosed new investors, and according to the company, unnamed venture capital firms. The new fund will complement Pantera Bitcoin Partners, a joint investment fund launched by Pantera, Fortress, Benchmark Capital and Ribbit Capital in early 2014 to invest in the cryptocurrency.
In interview, Pantera’s leadership team framed the fund as an extension of its past investments, which have included traditional investments in startups that have sought to incentivize distributed networks through the use of tokens. Included in the Pantera portfolio are Ripple and the Zcash Electric Coin Company, which use the XRP and ZEC tokens, respectively.
Pantera CEO Dan Morehead and Augur co-founder Joey Krug will serve as chief investment officers for the fund. With the move, Krug is also joining Pantera full-time.
The fund is currently open only to US institutions and individuals, though it intends to eventually open up support to non-US participants.
As explained by Paul Veradittakit, venture investor at Pantera Capital, the fund creation was sparked by the recent rapid uptick in interest in tokens and protocols. According to CoinDesk data, funding for ICOs has already surpassed traditional venture capital banking in 2017.