Pantera Capital has invested $300 million in crypto treasury companies, also called digital asset treasuries (DATs). The firm said these entities may deliver stronger yields than crypto ETFs.
On Tuesday, Cosmo Jiang, general partner at Pantera Capital, and Erik Lowe, head of content, said DATs “can generate yield to grow net asset value per share, resulting in more underlying token ownership over time than just holding spot.” They added that owning a DAT could bring higher return potential compared to holding tokens directly or through a crypto ETF.
The $300 million was deployed across crypto treasury companies in the United States, United Kingdom, and Israel. Their holdings include Bitcoin (BTC) $119,360, Ether (ETH) $4,618, Solana (SOL) $196.55, and several other altcoins.
How Digital Asset Treasuries Increase Token Holdings
According to Jiang and Lowe, digital asset treasuries use several methods to grow holdings in a per-share accretive way. These methods include:
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Generating staking rewards
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Participating in DeFi lending
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Issuing stock above net asset value
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Using convertible bonds to monetize volatility
While crypto ETFs follow asset prices directly, DATs can expand token reserves even in flat markets through yield strategies. This approach has drawn billions from investors and pushed the share prices of some crypto treasury companies higher.
Market analysts, however, have noted that the sector has grown crowded, which could increase risks for weaker participants.
BitMine Immersion Technologies as Pantera’s Model
Pantera’s first investment from its DAT Fund was in BitMine Immersion Technologies, chaired by Tom Lee. Pantera described BitMine as having a defined strategic plan and the leadership to execute it.
In two and a half months, BitMine became the largest Ether treasury company and the third-largest overall crypto treasury company among publicly traded firms. It holds 1.2 million ETH, worth around $5.3 billion, and aims to control 5% of Ether’s total supply.
The Ether treasury company grows its holdings through issuing stock at a premium to net asset value, using convertible bonds, and earning returns from staking and DeFi. Institutional investors in BitMine include Stan Druckenmiller, Bill Miller, and ARK Invest.
BitMine Stock Performance Compared to Ether
Since starting its Ether buying program at the end of June, BitMine (BMNR) shares have gained over 1,300%. Over the same period, Ether rose nearly 90%.
Pantera compared this performance to other high-quality digital asset treasuries, such as Strategy, noting increased interest from institutional investors in companies using the DAT model.
Warnings Over DAT Leverage and Market Exposure
Some industry figures have warned of potential risks in the growth of crypto treasury companies. Earlier this month, Ethereum co-founder Vitalik Buterin said that excessive leverage could threaten these firms’ stability.
Vance Spencer, co-founder of Framework Ventures, said most ETH purchased by digital asset treasuries will enter onchain borrowing markets, often used to loop or farm yields. This could add risk if market conditions turn negative.
In June, analysts at Standard Chartered warned that a sharp drop in Bitcoin prices could push many Bitcoin treasury companies into losses, highlighting the exposure that comes with concentrated crypto holdings.
