This year’s approval of spot bitcoin exchange-traded funds in the U.S. has provided substantial validation for the crypto industry, according to Pantera Capital general partner Franklin Bi, as the crypto venture capital firm is raising a new mega $1.25 billion fund.
While Bi declined to comment specifically on Pantera’s new fund, he told The Block in an interview that this is an opportune time for venture firms, in general, to raise new capital and position themselves to support emerging startups.
Bi said that the spot bitcoin ETF approval “validated significantly” the crypto industry. The approval “has really shown people that directionally speaking, regulation is still moving in a positive direction for digital assets,” he said. “That kind of validation has really solidified a lot of institutional investors’ conviction that this is a long-term technology trend and development cycle that they should have exposure to.”
Several crypto VCs raising new funds
Besides Pantera Capital, Paradigm is reportedly in talks to raise between $750 million and $850 million for a new fund. Galaxy Digital, Hack VC, and Hivemind Capital are each reportedly in the process of raising $100 million, $100 million, and $50 million for their respective new funds.
Crypto accelerator Alliance recently raised $20 million from Brevan Howard Digital and Galaxy Digital for its third fund, which is aiming to raise an additional $80 million by July. Peter Thiel’s venture capital firm Founders Fund also recently took a stake in Alliance. Meanwhile, crypto venture firm 1kx recently secured $75 million to support early-stage startups.
Bullish on gaming and DeFi
Within crypto, the gaming and decentralized finance (DeFi) verticals present significant investment opportunities, according to Bi. He also noted the emergence of real-world asset tokenization as a continuation of DeFi, bringing traditional financial assets into crypto.
Regarding startup valuations, Bi described them as “healthy” overall but noted a slight overheating in the early stages due to surplus capital chasing select investments at pre-seed and seed-level funding rounds. Bi finds Series A stage valuations appealing, particularly for teams demonstrating market success and long-term growth potential. Beyond Series A, valuations become “extremely attractive” because there is demand for capital at that stage, but the supply has been “pretty flat to decreasing,” Bi said.
Long-term focus
Pantera Capital remains focused on the fundamental growth of the crypto industry. Bi noted that blockchain technology is entering various global markets, including financial markets, supply chains, and consumer applications, aligning with the venture firm’s long-term strategy.
“So I think it’s a great time to really focus on those aspects of the industry and double down for the long term, which is what we’re doing,” Bi concluded.
An excerpt of this interview first appeared in The Block’s new The Funding newsletter. Subscribe to the free newsletter here to get expert insights first.
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