Apprenticing at Pantera Capital! How will the returns be if copying and following the investment projects of well-known institutions?

Founded in 2013, Pantera Capital, headquartered in California, is an investment firm focusing on blockchain technology and cryptocurrency projects. Despite the increasing number of cryptocurrency venture capital firms in recent years, Pantera, as the first U.S. Bitcoin investment company, remains active in the crypto space.

Therefore, the Pantera investment projects over the years have been organized for us to observe with data, to see if it is profitable for retail investors to buy in when the projects go live on exchanges after funding announcements in a "copycat" manner. Due to the maturity of the cryptocurrency industry being different from the past, investments made by Pantera before 2017 will not be included.

Notes:

• Assuming $100 invested in each project, calculating the highest and current returns
• Unreleased cryptocurrency projects and platforms are not included
• Current price increase calculated as of October 30th
• Initial price based on announcement release or CoinMarketCap first listing price

From the data compiled in the above chart, several observations can be made:

Altcoins generally perform poorly in the long term
Regardless of the private placement cost of Pantera's investment in altcoins, except for the recent decentralized exchange platform "DODO" which has shown positive returns since going live, the rest of the projects have experienced declines ranging from 12% to 99% since being listed on exchanges.

ICO issuance model is more favorable for institutions
As this year's DeFi issuance wave mostly follows the so-called "fair distribution" execution, with no pre-mining, no pre-sale, and no team holdings, institutions relatively lose the cost advantage of private placements, and the amount of funding is much less compared to the ICO era.

Myth of well-known funds' "strategic investments" does not guarantee profit
If we go back to the "FOMO" level of ICO in 2018, copying Pantera's strategy was feasible, with generally tens of times the increase, and Mithril (MITH) even reached a maximum increase of 1,164%, with total returns exceeding 200%. However, these profits were at the peak of the coin price, and the likelihood of selling at the peak is very low. It is more conservative and reasonable to recover the cost when the coin price doubles and keep half of the tokens for profit.

From the above observations, we should understand that unless one believes in having unique and precise investment insights, holding altcoins in the long term is almost a suicidal investment strategy.

Furthermore, participating in ICOs and IEOs to lower the cost basis is crucial. Projects funded in 2017, even after calculating the price post-exchange listing, still generally have tens of times the increase. However, after the second half of 2018, the probability of opening at a lower price seems much higher, making it difficult for retail investors to profit without participating in public offerings.

Lastly, the so-called "strategic investments" by well-known venture capital institutions are good for the projects and help investors distinguish project quality, but this does not guarantee profit. The cost of venture capital tokens is not transparent, and whether the project is listed for free to obtain tokens is also unknown. In addition, discussing "value investing" in the crypto market is very difficult, even projects invested by Pantera have shown poor long-term price performance.

Therefore, returning to the main theme of this article, the strategy of buying in by copying Pantera when projects go live on exchanges has proven to be unfeasible in the market over the past two years. However, if the glory of the ICO era reappears in the future, entering the market with funds that one can afford to take risks with should bring a decent return.