TLDR
- Pantera Capital has invested over $300 million into digital asset treasury (DAT) companies that hold crypto on their balance sheets
- BitMine Immersion has grown ETH per share by 330% in its first month, becoming the largest ETH treasury globally with 1.15 million ETH worth $4.9 billion
- Pantera believes DAT companies can offer higher returns than holding crypto directly or through ETFs by generating yield and growing token holdings per share
- The firm’s DAT portfolio spans eight tokens including Bitcoin, Ethereum, and Solana across companies in the US, UK, and Israel
- BitMine’s share price rose from $4.27 to $51 in just over a month, with the company aiming to acquire 5% of Ethereum’s total supply
Pantera Capital has invested over $300 million into digital asset treasury companies, marking the venture capital firm’s major bet on a growing category of public companies. The firm disclosed this investment figure for the first time in its blockchain letter published Tuesday.
Digital asset treasury companies hold large crypto reserves on their balance sheets. Pantera believes these companies can generate better returns than holding crypto directly or through exchange-traded funds.
The investment thesis centers on yield generation. Pantera states that DAT companies “can generate yield to grow net asset value per share, resulting in more underlying token ownership over time than just holding spot.”
Pantera has raised two DAT-specific funds without disclosing their sizes. General partner Cosmo Jiang confirmed the two funds have collectively raised over $100 million.
The firm’s DAT portfolio covers eight different tokens. These include Bitcoin, Ethereum, Solana, BNB, Toncoin, Hyperliquid, Sui, and Ethena.
Portfolio companies span three countries including the United States, United Kingdom, and Israel. The companies include BitMine Immersion, Twenty One Capital, DeFi Development Corp, SharpLink Gaming, Satsuma Technology, Verb Technology Company, CEA Industries, and Mill City Ventures III.
BitMine Immersion Leads Performance
BitMine Immersion stands as Pantera’s top example of DAT success. The company recently launched its Ethereum treasury strategy and has become the largest ETH treasury globally.
BitMine now holds 1.15 million ETH worth $4.9 billion as of August 10. This makes it the third-largest DAT company worldwide.
The company has grown ETH per share by 330% in its first month. This pace exceeds Strategy’s early Bitcoin accumulation rate, according to Pantera.
BitMine’s share price jumped from $4.27 at the end of June to $51 in just over a month. Pantera attributes 60% of this gain to ETH-per-share growth, 20% to Ethereum’s price rally, and 20% to NAV multiple expansion.
Strategy and Market Position
BitMine increases tokens per share through multiple methods. The company issues stock above net asset value and generates staking rewards and DeFi yields.
The company also uses convertible bonds to monetize volatility. BitMine aims to acquire 5% of Ethereum’s total supply over time.
Traditional finance institutions have backed BitMine including Stan Druckenmiller, Bill Miller, and ARK Invest. The company trades at a 1.7x NAV multiple.
Pantera compares this premium to top banks trading above book value. The firm notes that JPM trades at over 2x book value because investors believe it can generate sustainable yields.
However, risks exist in the crypto treasury space. Ethereum co-founder Vitalik Buterin warned about overleveraging risks if not managed responsibly.
Standard Chartered analysts cautioned in June that new Bitcoin treasury companies could face danger if Bitcoin prices drop sharply. BitMine’s share price has gained over 1,300% since starting its ETH strategy while Ethereum gained almost 90% over the same period.
