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Original title:Pantera Bitcoin Fund Hits 1000x
Author: Dan Morehead, founder of Pantera Capital; compiled by: 0xjs@Bitchain Vision
1000 times: Pantera Bitcoin Fund
Pantera Bitcoin Fund recently achieved a crazy milestone – 1,000x profits.
The surge in Bitcoin prices after the election brought Pantera Bitcoin Fund to a further 30%.After deducting expenses and expenses, the Pantera Bitcoin Fund’s lifetime return is now 131,165%.
I want to share the original logic – because today it is equally attractive to me.
The day we chose to launch the Pantera Bitcoin Fund was actually the lowest point in the past eleven years.
The first investment memo is still well read.
In 2013, we bought 2% of the world’s Bitcoin at that time.
Even after eleven years, Bitcoin still strives to grow up like a watermelon seed (squeezing up like a watermelon seed, translator’s note: that is, it is still in the early stages).
Honestly, I just couldn’t help thinking,We will also get very considerable returns for many years to come.
Gold in 1000 BC
My core point was written in a month:
“I talked to an investor yesterday and he replied with some disdain that it was like buying gold. No,It’s like buying gold in 1000 BC, with 99% of financial wealth not reaching Bitcoin.When they do this, the value of Bitcoin is either zero or [up several orders of magnitude].”
As an industry, we have made some progress.There are still about 95% of the financial wealth that has not yet allocated their positions.
The catalyst that contributed to this change—from 5% in 2024 to higher numbers—just happened: the clarity of U.S. regulation.Large institutional management companies such as BlackRock and Fidelity now provide extremely cheap and efficient services to anyone with a brokerage account.This new convenient service will ultimately enable tens of millions of investors and individuals to access this important new asset class.
We believe that the first U.S. president to support blockchain will benefit the entire industry greatly.We believe that blockchain success is in the best interest of the United States, and we believe that everyone in the U.S. Congress will eventually take a neutral or supportive position—this is already starting to happen.The regulatory headwinds of blockchain over the past 15 years are now turning into smooth sailing.
I still believe in what I wrote eleven years ago:
“I think the world is more than 50% likely to adopt a global currency/payment system, where free encryption technology replaces the very expensive trust collected by banks/VISA-MasterCard/Western Union/PayPal/ etc.’.Bitcoin will surpass cash, electronic fiat currency, gold, bearer bonds, large stone plates, etc.It can do all these things.This is the first global currency since gold.This is the first borderless payment system ever.”
[When Bitcoin price is $104]
I still feel this way.We are still in our early stages.95% of financial wealth has not yet touched blockchain.They are just beginning this massive transformation now.When they start to transform, the price of Bitcoin could reach $740,000 per BTC.
[When Bitcoin price is $254]
The market did surge.In less than a month, the price of Bitcoin rose to $1,000, and now it has risen by three orders of magnitude.
11-year compound annual growth rate reaches 88%
I can imagine an investor thinking, “Bitcoin has doubled this year. Well, I think I missed it.” And then gave up.
No, this is the wrong mentality.On average, it almost doubles every year.Since we launched the Pantera Bitcoin Fund 11 years ago, it has a CAGR of 88%.
Increase one order of magnitude
Bitcoin has achieved three orders of magnitude (1000 times) growth.It seems feasible to grow another order of magnitude (10 times).If Bitcoin reaches $740,000 per BTC, then Bitcoin’s market capitalization will reach $15 trillion.This is not an incredible number relative to $500 trillion in financial assets.
Although the past does not necessarily predict the future,If this trend continues, Bitcoin will reach $740,000 in April 2028.
I think it will take a few years, but I do think there is a great chance that this will come true.
This is my mindset: I won’t bet on my life, I’m not 100.00% sure blockchain assets will rise, but when you multiply the possibility of the rise by the order of magnitude or greater of the industry’s possible rise, the resultIt will end up being much better than other assets that can be invested in.The expected value of Bitcoin transactions is the most eye-catching I’ve seen in nearly four decades.
This is not easy
It seems obvious now, but it is actually difficult.
After the 87% plunge in December 2013, Bitcoin gradually lost its meaning.More than three years later, the market remains sluggish.By 2016, almost everyone had given up on Bitcoin.Investors are not interested.
That year I flew all over the world and attended 170 investor meetings.The result of all these efforts is that we only raised $1 million.
The administrative fee is $17,241.One hundred dollars per meeting.
We can buy the hotel!!!
I am a loyal team member by nature.I have always hoped that the Bitcoin team will win.We have been doing everything we can to help the community for many years.So when Expedia (Note: Chinese name Yikexing, a well-known online travel company) announced in 2014 that they would accept Bitcoin, all our travel expenses on Expedia were paid in Bitcoin.
In 2015, our team spent 59 nights on the road, spending an average of 1.5 bitcoins per night, and a total of 88 bitcoins.
This is equivalent to the fiat currency of 8.6831.36 million today!?!?!
We can buy two hotels for this money!
Amazing growth in the blockchain industry
In 2013, when we were about to launch the Pantera Bitcoin Fund, I opened accounts on several exchanges and transferred money for emergencies.When I first walked from my office into Wells Fargo on Market Street in San Francisco, preparing to send money to Ljubljana, Slovenia, I didn’t even know how the word Ljubljana was spelled.Everything feels very suspicious.So much so that the bank manager came over to interrogate what I was doing, and asked for a long time.
(I know now that Slovenia is a lovely country, located to the right of Venice, below Austria.)
But at that time I wondered if I was crazy.My money transfer target is an unknown small startup, which sounds equally suspicious.
The price of Bitcoin was about $130 at the time.Over the next few days, I watched the price of Bitcoin drop from $130 to $100.It’s interesting to think back, which is basically the same as what skeptics call “FUD-Fear, Uncertainty, Doubt” in the Bitcoin bear market.Even when all the problems arose when the Bitcoin price fell to $65, I decided to ALL IN – launch the Pantera Bitcoin Fund.Thirty years of trading intuition have convinced me that that day was the day.
I sent the above email to a small group of Bitcoin enthusiasts, and there were about twenty people at the time, and they said, “I just wanted to get involved.”
(There are now hundreds of thousands of copies of this list, and the subsequent letters have been read 2.7 million times.)
I logged into a startup called Coinbase and tried to buy 30,000 bitcoins.Pop-up window shows that the fund’s daily limit is $50 (bucks)——Unlike Wall Street jargon, “bucks” on Wall Street sometimes means millions.One Ulysses S. Grant every day (note: the portrait printed on the $50 note is Grant, the 18th President of the United States).I almost had a heart attack.
Since this is a trendy startup, they don’t have an address or phone number.I sent an email to their support email, and the title was abnormally written in capital letters: “I WANT TO BUY TWO MILLION DOLLARS OF BITCOIN”.Four days later, their only employee—a guy named Olaf—wrote back, “Okay, your limit is $300 now.”Even with my newly expanded trading limit, it will take 6,667 days to complete the deal.
Even if I buy it today, there are still 2,522 days left!
Thankfully, I was able to buy bitcoin on Bitstamp, and the industry has grown.Today, the cryptocurrency market trades at $130 billion a day.The pace of development of this industry is amazing.
Blockchain as an asset class
I sometimes feel like a gorilla in the forest, noticing a glittering object on the ground… Pick it up… Spin it… Want to know what it is…
Bitcoin!
I certainly don’t understand all the nuances of the incredible tech projects that are happening in this field, but I feel like I’ve seen this movie before.
I am Goldman Sachs’ first Asset-Backed Securities trader.Now everyone thinks ABS is an asset class.I was there when they did the GSCI (Note: Goldman Sachs Commodity Index).Now everyone thinks that commodities are an asset class.In the 1990s, I invested in Emerging Markets.Now everyone thinks EM is an asset class.
The same is true for blockchain.I believe that in the near future, every investment company will have a blockchain team and a considerable, permanent blockchain fund.
Asymmetric transactions
My global macro background brought me into the blockchain field from the beginning.This asymmetry of transactions—working on the world’s largest market—makes this opportunity several orders of magnitude larger than the deals we usually chase around the world.I believe this is the most asymmetric deal I have ever seen.
This topic is best explained by a comparison of the second Pantera Blockchain Summit in March 2014:
“At dinner hours before late night poker games, Morehead joked that all the bitcoins in the world were worth roughly the same as Urban Outfitters, a company that made ripped jeans and dorm decorations — about 50Billion dollars. ‘This is crazy, right?’ Morehead said.
“I think that in centuries, when they archaeologically archaeologically like in Planet of the Apes, Bitcoin may have a greater impact on the world than Urban Outfitters.”
– Nathaniel Popper, 2015, Digital Gold
When I updated in November 2020, Bitcoin had the same market cap as L’Oreal.Waterproof mascara is undoubtedly an amazing invention, but I still think there is asymmetry.
Further digging…
“At L’Oreal, our mission is to enable the public to enjoy the most affordable and quality skin care, makeup, hair care and hair dye beauty products.”
marvelous.Bitcoin’s mission sounds surprisingly similar: democratizing financial services.
I think the mission in finance will eventually be greater.
Bitcoin’s market value has recently surpassed Meta (i.e. Facebook).Photo sharing is really cool, but I think financial inclusion will be even greater for everyone on the planet who owns a smartphone.
There are five left to surpass…
