Today's guest is Paul, Partner at Pantera Capital – one of the earliest institutional Blockchain investment firms. Paul began by sharing his personal journey from learning about Blockchain to eventually joining Pantera Capital to drive its VC funds. We then went on to discuss its investment thesis and how it evolved from the first fund to third fund now, and then broadened our discussion to evaluate popular industry narratives namely cryptocurrency will become a new asset class and Bitcoin's role as a safe haven asset. And lastly, we explored how blockchain will impact the VC industry.

Pls note that this episode was recorded before the March 12th market crash across cryptocurrencies. For listeners who are interested to read more about what happened and the impact of Covid-19 on crypto, I have shortlisted some articles, do refer to the episode links for more information.

Key Takeaways

• Fiat to crypto on-ramps are very key for people to get access to cryptocurrencies; so, exchanges and wallets that can provide fiat to crypto abilities remain as Pantera's key investment focus
• Liquidity and scalability remain as the key challenges to be solved before large scale decentralised use cases can emerge; for now, speculation remains as the key usage for crypto
• Besides having institutional grade infrastructures in place, further development in derivatives and regulatory clarity will be needed before institutions invest directly into crypto or token as an asset class; currently their exposure to the industry is via indirect investments into private equity funds
• It is still early to determine the investment success of cryptocurrencies as a new asset class; but the chances of diversified crypto investment going to zero in value are low while the chances of it generating exorbitant returns are present; so it is about limiting one's exposure to hedge the downside risk with a potential to benefit from its upside

Episode links

Pantera Capital

https://www.panteracapital.com/

What happened on March 12th

https://multicoin.capital/2020/03/17/march-12-the-day-crypto-market-structure-broke/ https://multicoin.capital/2020/03/20/march-12-the-day-crypto-market-structure-broke-part-2/

Crypto in this crisis: Pantera Blockchain Letter March 2020

https://medium.com/@PanteraCapital/crypto-in-this-crisis-pantera-blockchain-letter-march-2020-4c73af3aaaf7