AI AND BLOCKCHAIN1
Cosmo Jiang, General Partner
In recent years, artificial intelligence has shifted from promising technology to a foundational layer of modern business. Investors are rightly focused on its implications. But AI is only half the story. Blockchain in the past few years has matured beyond cryptocurrencies into infrastructure for coordinating trust, ownership, and incentives across decentralized systems. As blockchain-focused investors, we believe it will be central to AI’s growth. The limited attention paid to how these two technologies reinforce one another is a clear oversight.
The intersection of blockchain and artificial intelligence is becoming an increasingly important area of innovation as entrepreneurs begin building systems to combine the strengths of both technologies. We see many compelling ways that blockchain can uniquely enable AI development, and that AI will also accelerate economic activity on blockchain networks.
This convergence has become one of the major research focuses for our team, and we are dedicating a growing share of our incremental research time and investment dollars to opportunities emerging at this intersection.
Every Major Innovation Wave Has Been A Convergence
Periods of technological acceleration often occur when two powerful systems begin reinforcing one another. Steam power and railroads enabled the creation of national industrial economies in the 19th century, including great businesses like Union Pacific Railroad to lateral winners like Standard Oil and Carnegie Steel. Electricity and modern manufacturing systems drove the second major wave of industrialization in the early 20th century, enabling the rise of industrial giants like General Electric and, surprisingly, an acceleration to urbanization and the creation of the NY Subway system. Mass automobiles necessitated the creation of highway infrastructure, which reshaped how people lived and consumed in the mid-20th century – which led to the unexpected emergence of national chains like Walmart and McDonald’s. Recently, the internet accelerated with the advent of smartphones, fostering global enterprise tech companies that define today’s technology landscape. It was hard to imagine that Uber would arise from the first iPhone in 2007.
In each of these periods, the largest and most enduring companies were not always those that developed the initial technology, but those that built on top of the new infrastructure. Instead, a new capability paired with enabling infrastructure unlocked entirely new economic systems and category-defining companies. We believe a similar dynamic is set to emerge between AI, the new capability, and blockchain, an enabling infrastructure. While each technology can advance independently, the complementarity and positive feedback loops between them suggests that their combined impact may be far greater than either in isolation.
Foundation For The Next Convergence – AI And Blockchain
The foundational ingredients are there for AI and blockchain to converge.
When thinking about innovation, it’s always important to first start with the supply of talent as a key indicator. From a talent perspective, there is a high degree of overlap. Both blockchain (cryptography) and AI (statistics) have shared roots as branches of math every engineer or mathematician has had exposure to. Indeed, we see this play out in the talent pool where many founders in Pantera’s blockchain portfolio companies have AI experience. Many leaders in AI today have blockchain experience. Beyond technical skillsets, the two ecosystems also share a culture of open innovation. Both fields have been driven by global open-source communities (open model frameworks, open blockchain networks), rapid experimentation, and permissionless collaboration. The result is a deep pool of talent operating at the intersection of both fields, creating a melting pot of ideas.
From a philosophical perspective, blockchain and AI are highly complementary technologies. Sam Altman once wrote, “AI is indefinite abundance and crypto is definite scarcity”. AI dramatically lowers the cost of producing information, enabling infinite content generation, agents, and digital identities – or abundance. Blockchain uses cryptography and distributed consensus to verify authenticity and enforce ownership – or scarcity – in a way that minimizes trust assumptions. Abundance and scarcity are yin and yang.
AI And Blockchain Fuel Each Other’s Growth
In practice, we see a number of ways that blockchain can help accelerate AI innovation and, vice versa, that AI can accelerate blockchain adoption. With blockchain innovations that could accelerate AI innovation, we include open systems, resource aggregation and identity. Conversely, AI can accelerate blockchain through the rise of agentic finance, particularly relevant today with the rise of Openclaw, safety, governance, and ease of use, or abstracting away the complexities of blockchain that have held back adoption.
We explore each of these themes in greater depths in our recent webinar, where those who are interested can learn more: link
WORLD :: THE NEED FOR PROOF OF PERSONHOOD
In a world where AI agents and AI-generated content become increasingly ubiquitous, the ability to distinguish between humans, machines, and synthetic media becomes critical. Traditional identity systems were designed for humans interacting through centralized institutions. They rely on passports, government records, or bank accounts – systems that do not translate easily to a digital world populated by autonomous agents, and that are breaking under the weight of the disruption caused by AI.
The world needs a global, cryptographically secure, privacy preserving, censorship resistant way to prove identity attributes in the digital world. What better way to achieve that than using blockchain, which has those properties? Blockchain-based identity systems allow individuals to prove attributes about themselves, such as uniqueness or personhood, without relying on centralized authorities. At the same time, cryptographic systems can provide verifiable records of digital activity and provenance, helping determine whether a piece of content was generated by a human, an AI system, or a combination of both.
One protocol we’re invested in that is trying to deliver an identity solution is World, formerly known as Worldcoin. World is scaling a global, privacy-preserving identity and financial network using the concept of “Proof of Personhood”, which refers to proving an individual is both human and unique. World authenticates users as unique humans after they undergo an iris scan with a World Orb, a biometric imaging hardware device, and issues each unique human a World ID on Worldchain, the World blockchain.
Our team was invited to World’s “Lift Off” event in San Francisco on April 17th, where we had the opportunity to see demos about all the new utility they have added largely through partnerships with big tech companies. World’s announced partnership use cases now include:
I had the opportunity to sit down and interview Sam Altman about his perspective on how blockchain fits with AI, and in particular how World is a critical need as AI adoption increases. You can see this interview here: Link
BITCOIN CHEAP RELATIVE TO AI AND TREND
When I speak to institutional investors, by far the biggest worry on their minds is:
“How can I pay these valuations in AI?”
Some close their eyes and join the private rounds going on right now. The majority just can’t pull the trigger – and are stressed about it. The feeling that they may be missing something big.
Investing is all about relative value.
In this letter I’m going to make the case that crypto is cheap – and especially so for those of you who need to choose what to invest in and AI is in your investment “benchmark” such as it is.
Both blockchain and AI are going to be “something big”.
They’ve historically been somewhat synchronized. However, there’s a historic divergence right now:
One is at all-time-highs – and sucking up dollar amounts that are starting to be visible from outerspace. (At $2.5 trillion spending on AI in 2026 will be more than the GDP/income of 186 of the 195 countries on earth.)
The other has fallen 50% and is trading near the lowest relative to its long-term trend as it has ever been.
We created an index tracking the top ten AI companies. They are trading at a 50% premium to their four-year trend. By contrast, bitcoin is trading at a 42% discount to its own long-term trend.
The signal is hard to ignore: on a trend-adjusted basis, crypto remains remarkably cheap relative to AI at this point.
This is a record divergence.
Crypto seems very cheap – relative to its adjacent technology, AI.
BLACKROCK — THE BID :: LATIN AMERICA INVESTMENT FORUM
I joined Robbie Mitchnick, BlackRock’s Head of Digital Assets, and host Oscar Pulido live from BlackRock’s Latin America Investment Forum in Miami. We discussed how crypto has matured into an investible asset class, where institutional adoption stands today, and what the convergence of AI and blockchain means for portfolios.
A few exchanges worth highlighting:
On The Inverted Adoption Curve
Most asset classes start with “smart money” and end with retail. Crypto inverted that. Individuals built the market. Institutional capital is the cohort still trying to catch up.
“The big opportunity is the success we’ve already seen in our industries – really just come from retail and individuals. Institutional investment has yet to come. Robbie’s point about the barriers imposed by regulatory bodies; that’s really held the industry back. Even some of the massive Wall Street firms are just now allowing people to own any simple product like an ETF. That should have been ten years ago. And for whatever reason, all that was held back. To my mind, that’s the opportunity. We’re just getting started with most people addressing this.”
The Missing Bear Case
“I’ve been doing this for fourteen years and I keep asking people for any well-written paper that explains why crypto is not an important investment in a portfolio. There really isn’t one. You get the Warren Buffett ‘it’s rat poison’ lines once in a while, but no one ever actually sits down and writes a 20-page paper on why you shouldn’t invest in crypto.
“That would be my advice to anyone who hasn’t yet done it — spend a couple of hours reading about blockchain. When someone actually spends the time, they say, ‘Oh man, I really should put 1% or 2% of my portfolio into this because it might keep going up 10x every couple of years.’ “
Forced In
With crypto companies now in the S&P 500, having no allocation means you’re effectively short. You have to have an opinion now.
“The restrictions that have artificially held us back are coming off. The US SEC wouldn’t allow IPOs for a long time. Great companies like Circle that we were invested in for 12 years couldn’t go public. They’re now public, and we’ve had five portfolio companies go public in the last nine months. Another example: there are now crypto companies in the S&P 500. So you have to have an opinion now. If you don’t own any crypto companies, you’re short the index.
“All those things are forcing people to have an opinion and bringing them into the industry because it is an important new asset class. I’ve seen this before. I was the first asset-backed securities trader at Goldman in the eighties. People thought I was crazy buying loans. Now everyone thinks ABS is a thing, emerging markets is a thing, commodities is a thing. Blockchain will be an asset class too.”
Latin Americans Get It
“Citizens of Latin American countries have a huge advantage over Americans in seeing this as an opportunity. If you go to an American and say, ‘Hey, we’ve got a new currency that’s better than the paper money you have,’ they often don’t get it. If you go to a citizen of a Latin American country and say, ‘Don’t trust your government with paper money,’ they get it right away and buy Bitcoin. Latin America has always been a huge place for us. One of our earliest investments was in the region, because you don’t have to explain why people would want to sell their national paper currency and buy bitcoin. It’s self-evident to them.”
“The other thing that’s important: remittances are huge for citizens of Latin America. The current remittance market is really crazy. Gatekeepers own the rails that people use to move money. For the migrant, that’s a month’s wages – they literally spend an entire month doing really difficult jobs just to pay the remittance company and their family only gets 11 months. Bitcoin and stablecoins are the answer. Already 10% of all US-to-Mexico remittance volume is going over Bitso. People in Latin America get it.”
On Bitcoin’s Cycle Structure
Robbie also made an observation that I’ve been saying and it’s worth repeating to LPs: in each of bitcoin’s prior cycles, the trough at the end of the bear market has been higher than the peak of the previous cycle. Five cycles in.
“Volatility and cycles have been an intrinsic part of bitcoin and crypto since the beginning. This is the end of the fifth cycle in Bitcoin’s history. Dan’s now-famous investment memo – which should probably be in the investment hall of fame somewhere – was at the start of the second cycle, in 2013. We’ve had five spectacular bull market runs followed by five pretty spectacular corrections. And in each prior one, the trough at the end of the bear market is actually higher than the prior cycle’s peak. Over time, each cycle has been progressively higher than the last to the ultimate result that Bitcoin is up just shy of a million X since it first started trading on exchanges. That’s an extraordinary run through multiple 70, 75, 80% drawdowns. That’s why it’s so important to be a long-term investor in this space and to take the long-term perspective.”
— Robbie Mitchnick, BlackRock
On The AI x Blockchain Convergence
Robbie made the case we’ve been making: AI agents are not going to open bank accounts or use Fedwire, Swift, or ACH. They’re going to use blockchain-based monetary instruments. Blockchain is the natural currency layer of the agent economy.
“The convergence of crypto with AI is the most important thing because AI is the most important thing. I’m a believer in digital assets as Dan is, but it would be foolish to claim that digital assets is on a par with AI. Nothing is on par with AI in terms of the disruptive force it represents. The important thing is to consider what the interplay of those two forces looks like. As the AI agent economy accelerates, AI agents are not going to go get bank accounts. They’re not going to use Fedwire or Swift or ACH. They’re going to use some sort of blockchain-based monetary instrument. Why? Because what is AI? It is machine data and intelligence. What is crypto? Crypto is machine-native money. Whether that’s Bitcoin, ether, stablecoins, or something else, it’s the clear favorite to be the natural currency mechanism of that economy.”
— Robbie Mitchnick, BlackRock
You can listen to the full episode here.
RUT ROH! THE ROBOT IS COMING
“Rut roh!“
There are plenty of AI pundits so I won’t go too deep – just going to state the obvious…
#BuyCrypto
Robots can’t use paper money.
I like to distill investing down into simple concepts…
While you might not have a conscious view on:
“AI – under-appreciated or over-hyped?”
…if you don’t have a meaningful position in blockchain assets you are expressing a huge short in AI.
Just four humans are projected to spend a combined $650 billion in 2026 on AI infrastructure, including data centers and chips (the CEOs of Alphabet, Amazon, Meta, and Microsoft).
AI-related capital expenditure will account for roughly 30% of all S&P 500 capital expenditures.
If you don’t have meaningful percentage of your capital in blockchain you **are** making a bet.
The majority of institutional investors have zero exposure to cryptocurrencies and blockchain venture. Unless AI is a massive bust, they will have to cover their short someday.
A HISTORICAL PERSPECTIVE
John D. Rockefeller’s personal fortune peaked in 1913 at 3% of the country’s GDP.
Elon Musk’s paper worth is the same today ($850bn/$30,500bn).
His net worth exceeds the GDP of 83% of the world’s nations.
BUY LOW, SELL HIGH
Best to be holding or buying blockchain assets right now.
Whatever you do, DON’T SELL!
“Put the alternative back in Alts”
PANTERA CONFERENCE CALLS[1]
Our investment team hosts monthly conference calls to help educate the community on blockchain. The team discusses important developments that are happening within the industry and will often invite founders and CEOs of leading blockchain companies to participate in panel discussions. Below is a list of upcoming calls for which you can register via this link.
State of Tokenization :: Thematic Call
A walkthrough of Pantera’s State of Tokenization report, covering where real on-chain utility is emerging and how tokenized assets are progressing beyond simple wrappers
Tuesday, June 23, 2026 12:00pm Eastern Daylight Time / 18:00 Central European Summer Time / 12:00am Singapore Standard Time
https://panteracapital.com/state-of-tokenization/
Liquid Token Fund Investor Call
Tuesday, July 7, 2026 12:00pm Eastern Daylight Time / 18:00 Central European Summer Time / 12:00am Singapore Standard Time
Open only to Limited Partners of the fund.
Pantera Growth Opportunities Fund Call
Our newest strategy targeting growth-stage blockchain companies on the path to public markets
Tuesday, July 14, 2026 12:00pm Eastern Daylight Time / 18:00 Central European Summer Time / 12:00am Singapore Standard Time
https://panteracapital.com/pantera-growth-opportunities-fund-july-2026/
Pantera Fund V Call
An overview of Pantera’s fifth venture-style fund that offers exposure to the full spectrum of blockchain assets
Tuesday, August 11, 2026 12:00pm Eastern Daylight Time / 18:00 Central European Summer Time / 12:00am Singapore Standard Time
https://panteracapital.com/aug-11-conference-call-fund-v/
Join us in learning more about the industry, the opportunities we see on the horizon, and our funds.
PANTERA FUND V
We’ve found that most investors view blockchain as an asset class and would prefer to have a manager allocate amongst the various asset types. This compelled us to create Pantera Blockchain Fund (IV) in 2021, a wrapper for the entire spectrum of blockchain assets. Its successor — Pantera Fund V — is now open for subscriptions.
Similar to its predecessor, we believe this new fund is the most efficient way to get exposure to blockchain as an asset class. It is a continuation of the strategies we have employed at Pantera for twelve years across twelve venture and hedge funds.
Limited Partners have the flexibility to invest in just venture (Class V for “Venture”), or in venture, private tokens, and locked-up treasury tokens (Class P for “Privates”), or the all-in-one Class A.[1],[2]
As in all previous Pantera venture funds, we strongly support helping our LPs get access to private deals in this fund. Fund LPs with capital commitments of $25mm or more will have the option to collectively co-invest in at least 10% of each venture equity, private token, and special opportunity deal that the Fund invests over $10mm in. There is no management fee or carried interest on co-investments for those with co-investment rights.
We will endeavor to offer co-investment opportunities, on a capacity available-basis, to other LPs as well. These co-investment opportunities are subject to 1/10% fees.
We are now accepting subscriptions for Fund V. If you’re ready to invest, please click the button below to begin the process.
If you are new to Fund V and would like to receive additional information, click here. We also invite you to join our next call on Pantera Fund V on Tuesday, August 11, at 12:00pm Eastern Time. You may register here.
Pantera donates 1% of revenue from all new funds to 1% For The Planet.
[1] Important Disclosures – This Section Discusses Pantera’s Advisory Services. Information contained in this section relates to Pantera’s investment advisory business. Nothing contained herein should be construed as a recommendation to invest in any security or to undertake an investment advisory relationship, or as any form of investment, legal, tax, or financial advice or recommendation. Prospective investors should consult their own advisors prior to making an investment decision. Pantera has no duty to update these materials or notify recipients of any changes.
[1] The above is presented for illustrative purposes only as a sample of potential opportunities Pantera could evaluate for Fund V and is not intended to limit Pantera’s investment activities in any way. There is no guarantee that similar opportunities will be available, or that Fund V will have similar investments to its predecessor fund.
[2] The terms summarized here are provided for informational purposes only and do not constitute a complete overview of the terms of Fund V. Terms are subject to further review and are qualified in their entirety by Fund V’s offering and governing documents.