Crypto hedge fund Pantera on track to raise $175 million despite bitcoin’s price slump

Silicon Valley is still finding plenty of reasons, and money, to pour into the cryptocurrency industry.

Despite bitcoin slumping by half this year, crypto hedge fund Pantera Capital is well on its way to hitting a $175 million target for its third and largest fund yet. According to a SEC disclosure filed this week, the firm has raised at least $71 million. Pantera executives said the total is now closer to $100 million.

Investors appear to be drawn to the focus of the newest Pantera fund. It’s more broadly about blockchain, which some pundits have called as transformative as the internet, instead of just cryptocurrency, which Warren Buffett famously called rat poison.

In the newest fund, which has 140 investors so far and a 10-year investment period, buyers get equity in a blockchain company instead of just investing in a “coin.”

Initial coin offerings, or ICOs, often promise investors a piece of that company down the road or access to a product that might not even exist yet.

“We’re seeing a shift in momentum,” said Paul Veradittakit, a partner at Pantera. “We’re seeing a lot more interesting VC deals, and more equity deals this year than ICO deals.”

ICOs have gotten too controversial for some investors. While some projects are completely legitimate, others have been exposed as running frauds and caught the attention of the Securities and Exchange Commission. The agency has shut down multiple projects, and tech giants Google, Facebook, and Twitter banned ICO advertising on their platforms in March.

Veradittakit said the firm is seeing interest from some first-time investors who see the crypto slump as a buying opportunity. In the most recent investor letter, Pantera said its bitcoin fund’s lifetime gain was more than 10,000 percent, net of fees and expenses.

The third fund’s total eclipses the size of earlier funds by Pantera Capital, a Menlo Park, California, firm founded by former Goldman trader Dan Morehead. Its second fund reached $25 million, while the first fund was $13 million, which closed in 2013.

The new fund’s first investment was in a project called Bakkt that began in early August and is backed by Starbucks, Intercontinental Exchange, Microsoft, BCG and others. Bakkt said it aims to let consumers and institutions buy, sell, store and spend cryptocurrencies on a global network by this fall.