Original title: Pantera Bitcoin Fund Hits 1000x

Author: Dan Morehead, founder of Pantera Capital; Compiler: 0xjs@金财经

1000x: Pantera Bitcoin Fund

Pantera Bitcoin Fund Recently, a crazy milestone was achieved - 1,000 times earnings.

The post-election surge in Bitcoin prices sent the Pantera Bitcoin Fund up a further 30%. After fees and expenses, Pantera Bitcoin Fund's lifetime return is now 131,165%.

I want to share the original logic - because it is just as compelling to me today.

The day we chose to launch the Pantera Bitcoin Fund was actually the lowest point in the past eleven years.

The first investment memo still reads well written.

In 2013, we purchased 2% of the world’s Bitcoins at that time.

Even after eleven years, Bitcoin is still squeezing up like a watermelon seed (Translator’s Note: It’s still in its early days).

Honestly, I just can't help but think that we can still have very substantial returns for many years to come.

Gold in 1000 BC

My core point was written a month later:

“I was discussing Bitcoin with an investor yesterday and he was a little disdainful The quick answer is 'It's like buying gold' No, it's like buying gold in 1000 BC, 99% of financial wealth has yet to touch Bitcoin and when they do, the value of Bitcoin is either zero. , or [Up by several orders of magnitude] ”

As an industry, we have made some progress. There are still probably 95% of financial wealth that has not allocated their positions.

The catalyst for this change — to a higher number from 5% in 2024 — has just happened: regulatory clarity in the United States. Large institutional management firms such as BlackRock and Fidelity now offer extremely cheap, efficient services to anyone with a brokerage account. This new convenient service will ultimately give tens of millions of investors and individuals access to this important new asset class.

We believe that the entire industry will benefit greatly from the first president of the United States to support blockchain. We believe it is in the best interest of the United States for blockchain to succeed, and we believe everyone in the U.S. Congress will eventually adopt a neutral or pro-blockchain position—and this is already starting to happen. Blockchain’s regulatory headwinds for 15 years are now turningtailwind.

I still firmly believe what I wrote eleven years ago:

“I think there is a better than 50% chance that the world will adopt a global currency/payment system, in In this system, free encryption technology replaces banks/VISA-MasterCard/Western The very expensive 'trust' that Union/PayPal/etc charge. Bitcoin will do all of these things for the first time since gold. A global currency. The first-ever borderless payment system. ”

[Bitcoin at $104]

I still feel the same way. We're still in the early stages. 95% of financial wealth has not yet touched the blockchain. They are only now beginning this massive transformation. When they start transitioning, the price of Bitcoin could reach $740,000 per BTC.

[When Bitcoin was at $254]

The market did surge. In less than a month, the price of Bitcoin reached $1,000 and is now up another three orders of magnitude.

11-year compound annual growth rate of 88%

I can imagine an investor thinking: "Bitcoin has doubled this year. Well, I guess I missed it." and then giving 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 grown at a compound annual growth rate of 88%.

Growth by another order of magnitude

Bitcoin has already achieved growth of three orders of magnitude (1,000 times). An increase of another order of magnitude (10x) seems feasible. If Bitcoin reaches $740,000 per BTC, the Bitcoin market cap will reach $15 trillion. Relative to $500 trillion in financial assets, this is not an incredible number.

While the past is not necessarily a predictor of the future, if this trend continues, Bitcoin will reach $740,000 in April 2028.

I think it's still a few years away, but I do think there's a good chance it will happen.

This is my mindset: I wouldn’t bet my life on the fact that I’m not 100.00% sure that blockchain assets will rise, but when you multiply the likelihood of a rise by the order of magnitude that the industry is likely to rise or higher, the results will end up being much better than other assets in which you can invest. The expected value of Bitcoin transactions is the most dramatic I have seen in nearly four decades.

It’s not easy

This may seem obvious now, butIt's actually very difficult.

After plunging 87% starting in December 2013, Bitcoin gradually lost its meaning. More than three years later, the market remains depressed. 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 this effort was that we only raised $1 million.

The management fee is $17,241. One hundred dollars per session.

We can buy the hotel! ! !

I am a loyal team player by nature. I always wanted the Bitcoin team to win. Over the years we have done everything we can to help the community. So when Expedia announced in 2014 that they would accept Bitcoin, all of our travel expenses on Expedia were paid for in Bitcoin.

In 2015, our team spent 59 nights on the road, spending an average of 1.5 Bitcoins per night, for a total of 88 Bitcoins.

This is equivalent to US$8,683,136 in today’s legal currency!?!?!

With this money, we can buy two hotels!

The amazing growth of the blockchain industry

In 2013, when we were preparing to launch the Pantera Bitcoin Fund, I opened accounts on several exchanges and wired money for emergencies. When I first walked from my office to Wells Fargo on Market Street in San Francisco to wire money to Ljubljana, Slovenia, I didn’t even know how to spell the word Ljubljana. Everything feels very fishy. So much so that the bank manager came over and asked me what I was doing for a long time.

(I know now that Slovenia is a lovely , to the right of Venice, below Austria.)

But at the time I wondered if I was crazy. The target of my money was a small, unknown startup that sounded equally fishy.

The price of Bitcoin at that time was about $130. Over the next few days, I watched the price of Bitcoin drop from $130 to $100. Funny in retrospect, this is basically the same thing as what skeptics called “FUD – Fear, Uncertainty, Doubt” during the Bitcoin bear market. Even with all the problems that arose when Bitcoin dropped to $65, I decided to ALL IN - launch the Pantera Bitcoin Fund. Thirty years of trading intuition lead me to believe that that was the day.

I sent the above email to a small group of Bitcoin enthusiasts, maybe twenty people at the time, and they said, "I just want to get involved."

(Now this listHundreds of thousands of copies have been made, and subsequent letters have been read 2.7 million times. )

I logged into a startup called Coinbase and tried to buy 30,000 Bitcoins. The pop-up showed that the fund's daily limit was $50 (bucks) — as opposed to Wall Street lingo, where "bucks" 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 new and trendy startup, they don’t have an address or phone number. I sent an email to their support account with the uncharacteristically all-caps title: “I WANT TO BUY TWO MILLION DOLLARS OF BITCOIN.” Four days later, their only employee - a guy named Olaf - wrote back and said, "Okay, your limit is now $300." Even with my newly expanded transaction limit, it would take 6,667 days to complete the transaction .

Even if you buy it today, there are still 2522 days left!

Thankfully, I was able to buy Bitcoin on Bitstamp and the industry grew. Today, the cryptocurrency market trades $130 billion every day. It’s amazing how fast this industry is growing.

Blockchain as an Asset Class

I sometimes feel like a gorilla in the forest, noticing a shiny object on the ground...picking it up...twirling it...thinking Know what it is...

Bitcoin!

I certainly don't understand all the nuances of the incredible technological projects happening in this space, but I feel like I've seen this movie before.

I was the first Asset-Backed Securities trader at Goldman Sachs. Everyone now thinks ABS is an asset class. I was there when they did the GSCI (Goldman Sachs Commodity Index). Everyone now thinks of commodities as an asset class. I invested in emerging markets in the 1990s. Everyone now thinks of EM as 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 sizable, permanent blockchain fund.

Asymmetric Trading

My global macro background got me into the blockchain field from the beginning. The asymmetry of this deal - working on the largest market in the world - makes this opportunity orders of magnitude larger than the deals we typically pursue around the world. I believe this is the most asymmetrical transaction I have ever seen.

This theme is best illustrated by a comparison from the second Pantera Blockchain Summit in March 2014:

"Over dinner a few hours before a late-night poker game, Morehead joked Said that at the time, all the Bitcoins in the world were worth about the same as Urban Outfitters, a company that made ripped jeans and dorm room decor — about $50 "That's crazy, right?" Morehead said. "I think that a few centuries from now, when they're like in Planet of the Apes, Bitcoin is going to have an impact on the world." The impact may be greater than Urban Outfitters. ”

–Nathaniel Popper, 2015 Year, "Digital Gold"

When I updated in November 2020, Bitcoin had the same market cap as L'Oréal. Waterproof mascara is undoubtedly an amazing invention, but I still think it is. There is an asymmetry.

Dig further…

“At L’Oréal, our mission is to make the most affordable, high-quality skin care, makeup, hair care and hair color available to everyone. beauty products. ”

That’s awesome. Bitcoin’s mission sounds eerily similar: to democratize financial services.

I thought the mission in finance would end up being bigger .

Bitcoin has recently surpassed Meta (i.e. Facebook) Photo sharing is cool, but I think for everyone on earth who has a smartphone. Financial inclusion will be greater

Five more to go...