Crypto-focused venture firm Pantera Capital is bringing in big returns for its investors this year, largely thanks to the impressive growth of decentralized finance (DeFi).
The Pantera Digital Asset Fund is up 86% on the year as of July 27, according to Dan Morehead, the company’s CEO and co-chief investment officer, and Joey Krug, their other co-chief investment officer. In a recent newsletter to investors, the executives also note that their ICO Fund is up 60% and their Bitcoin Fund has seen gains of 43%.
According to Morehead and Krug, DeFi is responsible for the Digital Asset Fund’s superior performance thus far.
“Pantera Digital Asset Fund has exposure to assets integral to the growing DeFi ecosystem, which is outpacing Bitcoin’s store-of-value play so far this year.“
The executives think the increase in demand for decentralized finance, particularly for digital asset lending and borrowing, is a promising development. They caution, however, that DeFi protocols will need increased scalability, better infrastructure, and easier fiat on-ramps before they can witness serious mainstream adoption.
Morehead and Krug highlight several projects, like Matic Network, bloXroute, Starkware, Wyre, and Alchemy, that are working on those improvements.
“The progress we have seen in these barriers, and our expectations going forward, have us very optimistic about the coming years.”
The firm’s ICO Fund has benefited from being an early investor in Ampleforth (AMPL), a DeFi “smart commodity money” project.
Although it has seen smaller gains this year, Pantera’s Bitcoin Fund has been a home-run for long-term investors. Over its seven-year lifetime, the fund has yielded a staggering 15,140% net of fees and expenses, outperforming Bitcoin over the same period.
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