By
Bhushan Akolkar
April 19th, 2024
The Pantera Liquid Token Fund suffered a massive drawdown in 2022, including a large November deficit especially after the FTX crash.
According to recent reports, Pantera Capital lost 80% of its liquid token fund in 2022 amid the severe crypto market downturn. The company also suffered a 23% deficit sustained in November alone, following FTX’s dramatic collapse.
Putting the Pantera 2022 liquid token fund loss in perspective, the Bloomberg Galaxy Crypto Index was down approximately 27% for the same year. However, a January investor call uploaded to YouTube six days ago revealed that Pantera’s fund had rebounded partly this month. According to the investor call, the world’s largest crypto hedge fund regained 47% in the first month of the new year.
At the time of the call, the Pantera Liquid Token Fund, a multi-strategy vehicle, had $198 million in assets under management (AUM). In addition, the liquid token fund, which typically invests in 15-25 liquid tokens at a time, also had 13 tokens in the portfolio.
According to Pantera’s website, the firm’s liquid token is “predominantly driven by a discretionary strategy focused on decentralized finance and adjacent assets.”
Notable Pantera Fund 2022 Happenings
At the investor call, Joey Krug, co-chief investment officer at Pantera, pointed out some notable developments that occurred last spring. According to Krug, the fund began to transition most of the portfolio away from altcoins and into Ether (ETH). The timing of this development matched the collapse of Terra’s USDT stablecoin and its sister coin, Luna. These collapses further triggered the collapse of crypto lending platform Celsius Network.
Despite Pantera’s move to Ether mid-last year, the crypto VC recently reallocated funds back to other altcoins in anticipation of an alt season. As Krug explained:
“I think we’re just starting now, recently, to start to rotate back into some alts that we think are going to outperform ETH over the coming cycle.”
Pantera remains optimistic about the potential of altcoins as the market shows signs of a recovery. However, observers opine that it is still too early to ascertain whether an alt season has begun or is in full swing.
Pantera’s decision to turn its capital back to altcoins reflects the increasing interest and popularity in decentralized finance (DeFi) projects. Many of these projects rely on altcoins as a facilitator, and Pantera reckons these tokens could potentially disrupt traditional finance. This means that altcoins could ultimately reshape the financial landscape.
Pantera’s top three performing altcoins for last November were Cosmos (ATOM), Chainlink (LINK), and Optimism (OP). Conversely, Uniswap (UNI), Solana (SOL), and ETH occupied the bottom slots.
Alt Season?
The prospect of an altcoin season remains debatable as the new year continues to unwind. However, in the previous bull run of 2020-2021, several altcoins saw explosive growth, with some prices surging up to 400 times.
Meanwhile, despite a recent correction, Bitcoin (BTC) continues to experience upward momentum, with its price remaining 1.1% higher in the past week. According to the Bitcoin Dominance (BTCD) index, which currently stands at 44.4, the leading crypto remains dominant.