Dan Morehead’s Pantera Bitcoin Fund has returned more than 65,000% since 2013 and its capital management arm has given $6 billion back to its investors
The Pantera Bitcoin Fund has returned more than 65,000 per cent since 2013, and his Pantera Capital Management, once a traditional hedge fund that wagered on macroeconomic trends, oversaw $5.6 billion of crypto assets at year-end. That’s on top of the $6 billion the firm has returned to investors.
There’s always a chance it will crash and burn. Bitcoin has tumbled more than 20 per cent to start the year, trading below $37,000 on Friday, well below its November peak of roughly $68,000 – a drop fuelled by expectations of rising global interest rates and aggressive moves by central banks to tame soaring inflation.
Morehead stood out during crypto’s adolescence because he immersed himself in it after a storied career in finance. He started trading bonds at Goldman in the 1980s, and later worked for hedge fund legend Julian Robertson before launching Menlo Park, California-based Pantera in 2003.
Rising inflation and how central banks respond to it will be a big theme of 2022, said Mr Morehead, who previously had wagered on the long-term decline in inflation and yields.
That trade “basically made my career”, he said. “I think it’s come all the way to the end of that story.”
Mr Morehead expects a reversal of that dynamic to drag on cryptocurrency prices, but it hasn’t dampened his enthusiasm for the underlying technology.
Pantera doesn’t just bet on Bitcoin. It’s venture-capital funds invest in firms supporting the crypto ecosystem, including exchanges such as FTX, Coinbase and Gemini, while the firm’s token funds are putting money to work in blockchain developers. Recently, Pantera has focused on decentralised finance, or DeFi, a movement seeking to supplant the old Wall Street ways of doing business.
“Bitcoin and blockchain are upending the financial world,” said Fortress Investment Group co-chief executive Pete Briger, who worked with Mr Morehead at Goldman. “Dan is at the epicentre of all that.” Mr Morehead could have got into cryptocurrencies even earlier, in 2011, when his brother introduced him to Bitcoin. He read about it some, thought it was a cool idea and then pretty much forgot about it.
“Blockchain is now being driven by all the excessive money-printing going on in the world,” said Mr Morehead, whose firm recently opened an outpost in Puerto Rico, which has become a haven for crypto investors.
Mr Morehead said he is no longer interested in betting on the traditional assets that defined his early career and that he hasn’t invested in anything other than crypto since 2013.
“Crypto is so much more compelling than any other trade out there.”
