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Pantera Capital is interested in potentially investing $100 million in Bitwise's ethereum (eth) spot ETF as seed capital if the funds are approved to launch.
June 18 Bitwise amendment S-1 claims Pantera has “indicated interest” in purchasing shares. Pantera would purchase the shares from authorized participants or broker-dealers in the market through at least one of its affiliated investment funds.
If Pantera or its affiliates proceed with the purchase under indication of interest, they will not be able to sell the shares in an open market sale for six months. However, they can dispose of the shares in a redemption transaction with authorized participants.
Pantera has not entered into a binding agreement or committed to making a purchase. You could invest more or less than $100 million or nothing at all.
Panther Bullish on ethereum ETF
in a crypto-owners-vote/”>June 18 In a letter to investors, Pantera Capital CEO Dan Morehead and other staff wrote that ethereum spot ETFs could attract “a substantial influx of new investors” previously excluded due to compliance reasons or limitations on brokerage accounts.
The firm believes that some investors may be more interested in and able to understand ethereum's reputation as a “technology platform” compared to bitcoin's status as “digital gold.”
The firm also acknowledged arguments that ethereum has underperformed over the past year and a half, which could make the asset a “strong catch-up trading candidate.”
Pantera added that ETFs could see a “surprising upside” due to low expectations around flows, but acknowledged the possibility of significant outflows.
The firm noted that Grayscale's ETHE fund could see outflows when it begins trading as an ETF. However, the exits could be “less significant” than the first Grayscale GBTC exits due to fewer forced sellers.
Pantera named Three Arrows Capital (3AC) and Genesis, which filed for bankruptcy in 2022 and 2023, respectively, as forced sellers who had to divest their stakes in GBTC.
Chain effects
Finally, Pantera said that eth spot ETF approvals could have broader “ripple effects,” including market growth and diversification benefits. According to the firm:
“The increased focus on eth may extend to the broader universe of protocols as investors explore ethereum as a technology platform.”
He added that eth approvals could lead to greater integration with major financial products, turning blockchain into “just another asset class” alongside thousands of other existing securities managed by registered investment advisors (RIAs).
Pantera also suggested that the latest approvals could lead to spot ETFs for other crypto tokens. Executives at JP Morgan, Bernstein, and Cboe have similarly discussed the possibility of other crypto ETFs, expressing varying levels of optimism.
