“Custer’s Last Stand was an armed engagement between combined forces of the Lakota, Northern Cheyenne, and Arapaho tribes and the 7th Cavalry Regiment of the United States Army.  The battle, which resulted in the defeat of U.S. forces, was the most significant action of the Great Sioux War of 1876.  It took place on June 25–26, 1876, along the Little Bighorn River in the Crow Indian Reservation in southeastern Montana Territory.”


— Wikipedia


Bitcoin skeptics have been fighting a losing war for over a decade.  Battle after battle going against them.  Some of the major battles include:


It’ll Get Hacked

The Silk Road Guy Takes Bitcoin

Bitcoin Is A Fraud

The U.S. Marshall’s Office Would Never Auction Bitcoin

It’s A Bubble

The Exchanges Are Tiny Startups

Wall St. Won’t Do Blockchain 

Governments Won’t Do Blockchain

There’s No Regulated Custodian


When the There’s No Regulated Custodian Battle fell to the combined forces of Fidelity, ICE’s Bakkt, Coinbase, BitGo, and others – I thought the war was over.  I was wrong.


A new battle has come roaring over the hill.  The last stand.


Like General Custer thinking his Gatling gun invincible on the field of battle – so too the forces of Fear-Uncertainty-Doubt.  They have recently brought out the ultimate weapon:  ESG.  


To be sure, it is a weapon so ominous that many forfeit the battlefield to avoid doing combat with it.  


ESG stands for Environmental, Social, and Governance.



It’s gonna be an epic battle.  And I’m not saying the E part of ESG doesn’t have some credence on Bitcoin, but I think that when the smoke clears it will have been a rout.  Bitcoin and other blockchains are wonderful for ESG. I believe Blockchain technology will have a profoundly positive impact on billions of peoples’ lives – making it unambiguously positive from an ESG standpoint.


Nothing is utopia-perfect.  Except for unconditional love, everything has a cost. 




“I think Sam [Englebardt] made an important point – that you have to weigh the costs versus the benefits.  That’s not part of the dialogue now.  


Two main points would be:


Yes, Bitcoin does consume a lot of electricity.  That’s true.  Most of the other blockchains use other consensus mechanisms that don’t consume electricity.  So, if you’re going to talk about energy consumption, you should not focus on just one of the blockchains.


“The second one would be the whole phrase of ESG is supposed to include more things.  If Bitcoin really does improve the lives of 3.5 billion people, financial inclusion, letting them have control over their own savings, that seems like the Social bit is pretty high.  Might be a small negative on the E part of ESG, but Bitcoin is going to have a big positive impact on the S and G parts.”


— Dan Morehead, Penn Blockchain Conference, April 23, 2021


We’ll explore a few perspectives on those tradeoffs later in this letter – in Bitcoin and other blockchains and also in gold and the tech/data monopolies.  Plenty of ESG sins to go around. 


The recent debate just focusing on one blockchain (Bitcoin) and just one issue (Environment) – it ignores the wonderful Social and Governance benefits blockchain is bringing to billions of people.  For populist politicians – who (rightly) hate centralized bank power – to think blockchain is not wonderful is something we should correct.




First, I don’t even debate the ESG-ness of “digital gold” (a.k.a. Bitcoin) with anybody who has ever owned old-school gold.  Gold is like the maxed-out perfect trifecta of ESG horribleness.  


I can’t imagine an asset less ESG.  Diesel smoke and toxic chemicals like sodium cyanide and sulfuric acid spilling out of open-pit strip mines and heavy metal pollutants in the tailings in some of the worst, most repressive kleptocracies on Earth.  



For illustration, the chemical process used in modern gold mining is called “cyanide heap leaching”.  Let’s just say, not very ESG at all.


Whatever ESG sins blockchain has, they are nothing compared to gold.




“He that is without sin among you, let him first cast a stone.”


— John 8:7


A quick take on the most valuable companies in America shows all is not ESG utopia. 


  • Apple’s products are built exclusively in a country that ranks dead last in ESG and is the world’s largest polluter – causing global warming.1  Apple’s products are all made of aluminum.  Aluminum smelting consumes about three percent of the world’s electricity – six times as much as Bitcoin.

  • Facebook doesn’t have even have one-third of E.S.G. – corporate Governance.  One guy controls the majority of voting shares.  Serious Social questions result from that one man’s ability to influence democratic elections, impact the lives and mental health of billions of people, etc.


The Judiciary Committee of the U.S. House of Representatives has recently found that the four largest (centralized) tech companies – those two plus Amazon and Google – abuse their monopoly positions.




My point is that unless your organization has already divested from gold and the tech monopolies on ESG grounds, it would be highly inconsistent to rule out blockchain.  

1 “China would be the lowest-ranked large market.” – David Harris, Head of Sustainable Investment at the London Stock Exchange Group, parent of FTSE Russell




Unfortunately, in 2010 somebody on the BitcoinTalk Forum picked the word “miner” to describe the firms that process transactions and provide security to the Bitcoin network.  The competing word at the time which lost out was “minting”.  While not great, “minting” would have been much less confusing.  Bitcoin miners have nothing in common with real-world miners.  They are basically the Visa/MasterCard of the system.


In real-world mining, if you double the hardware and fuel, you get double the newly-mined gold.  If you doubled Bitcoin hardware and electricity, there would be no change in the new supply of bitcoin:  6.25 bitcoins every ten minutes.


Bitcoin was set up as a one-computer-one-vote governance system (known as Proof-of-Work).  When my brother introduced me to Bitcoin in 2011, he was using a laptop.  As the value of Bitcoin rose, it became rational to buy bigger and bigger “computers”.  Now the Bitcoin network is processed on a huge array of 300-megawatt datacenters.




Miners all use the same chips.  Literally, their only competitive advantage is sourcing the least expensive energy on Earth.  They have massive incentives to find trapped energy that others cannot use.


“Another key factor that makes Bitcoin’s energy consumption different from that of most other industries is that bitcoin can be mined anywhere. Almost all of the energy used worldwide must be produced relatively close to its end users — but Bitcoin has no such limitation, enabling miners to utilize power sources that are inaccessible for most other applications.


“Hydro is the most well-known example of this. In the wet season in Sichuan and Yunnan, enormous quantities of renewable hydro energy are wasted every year. In these areas, production capacity massively outpaces local demand, and battery technology is far from advanced enough to make it worthwhile to store and transport energy from these rural regions into the urban centers that need it. These regions most likely represent the single largest stranded energy resource on the planet, and as such it’s no coincidence that these provinces are the heartlands of mining in China, responsible for almost 10% of global Bitcoin mining in the dry season and 50% in the wet season.


“Regions with the capacity to produce more energy than could be consumed locally, such as Iceland, Sichuan, and Yunnan, became net energy exporters through aluminum — and today, the same conditions that incentivized their investment in smelting have made those locations prime options for mining bitcoin. There are even a number of former aluminum smelters, such as the hydro Alcoa plant in Massena, NY, that have been directly repurposed as Bitcoin mines.”


— Nic Carter, How Much Energy Does Bitcoin Actually Consume?, Harvard Business Review, May 5, 2021


Bitcoin already has one of the highest proportions of renewable energy among all industries.  On the low end of the spectrum, Cambridge Center for Alternative Finance estimates that 39% of Bitcoin’s energy outlay derives from renewables.2  Most estimates are in the 40-60% ranges.  Some as high as 73%.  By comparison, only 12% of energy is from renewable sources in the United States as a whole.



2 Cambridge Center for Alternative Finance, 3rd Global Cryptoasset Benchmarking Study, https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study 



I wrote last month that a convergence of things caused the blockchain markets to go down sharply.  The two most impactful were:


  • China bans Bitcoin

  • Elon Musk’s 180


This whole Chinese Red Army vs. Elon Musk thing is like a Godzilla vs. Mothra battle.  Two supersized power titans doing chaotic battle – over Twitter no less!


Having seen China ban Bitcoin three times already in my career, I must admit I was dubious.  


That’s really the last kind of sketchy thing about Bitcoin.  It’s very clear that miners outside China use a much higher fraction of renewable energy than the rest of their societies.  It’s probably also true inside China, but since there’s no data from China, you can’t prove it.


Bitcoin marketing pitches basically end when you get the ol’


“But, what about coal-burning Chinese Bitcoin miners?”


It would be nice to have that go away.


It looks like it is.  Our analysis indicates that there is 31% less mining/energy consumption today than would have been predicted solely by the price movement.  It does seem that the Chinese policy action is taking a big bite out – as much as half of their total capacity already.  If they do really shut down Chinese Bitcoin mining, that would be awesome for our asset class.


I made it eight years without ever mentioning the words “Elon” or “Musk” in our investor letter.  This will be the second time in three months, but I have to admit he came up with an absolutely classic line.


When stating publicly for the first time that in addition to Tesla Motors still owning bitcoin – that he personally and SpaceX Corp. have also bought – and are still long – bitcoin, he said:


 “I might pump, but I don’t dump.”


— Elon Musk, Bitcoin as a Tool for Economic Empowerment, The B Word Conference, July 21, 2021




Random nuts on Twitter spreading misinformation (Fear, Uncertainty, and Doubt) is expected.  Academics really should be above that.  This academic paper is still one the most frequently cited on Bitcoin energy consumption:


“Bitcoin Emissions Alone 

Could Push Global Warming Above 2° C”


“The cumulative emissions of such usage growth could fall within the range of emissions likely to warm the planet by 2° C within only 16 years (red line). The cumulative emissions of Bitcoin usage will cross the 2° C threshold within 22 years if the current rate is similar to some of the slowest broadly adopted technologies, or within 11 years if adopted at the fastest rate at which other technologies have been incorporated (that is, the red area).



“Certainly, high electricity cost will push the development of more efficient hardware. However, reducing Bitcoin’s carbon footprint should not rest solely on some yet-to-be-developed hardware but include simple modifications to the overall system, such as adding more transactions per block or reducing the difficulty or time required to resolve the proof-of-work — both of which could result in immediate electricity reductions for Bitcoin usage.”


— Nature Climate Change, Bitcoin Emissions Alone Could Push Global Warming Above 2°C, October 2018


Uh…no…none of those things has anything to do with Bitcoin energy consumption.


Transactions don’t drive electricity.  Time between blocks doesn’t drive electricity.  Electricity is driven solely by the price of bitcoin.  We’ll dive into that soon. 




First, a couple of quick ones.  The author misses the whole theme-iness of Bitcoin.  The entire appeal is precisely that it doesn’t change.


His suggested changes are so simple they have in fact been tried a thousand times.  


That’s not an exaggeration.  There are a thousand so-called alt coins.  These alternatives to Bitcoin have tried all those changes.   Litecoin, for example, is among the first.  The time between blocks is four times faster – a new block every 2.5 minutes.  If that mattered it would be the dominant blockchain.  The annual block reward for Litecoin is just $362 million.  Bitcoin’s annual issuance is $13.1 billion.  Litecoin’s annualized block reward is just 2.8% of the value of Bitcoin’s.


One hundred million people voted on the feature set — Bitcoin.




However, reducing Bitcoin’s carbon footprint should not rest solely on some yet-to-be-developed hardware.”


Again, this has already happened.  New hardware has been developed at an astounding rate for over a decade.  Since January 1, 2014 Bitcoin mining hardware has increased power 11.4x every two years.  That’s Moore’s Law on crack. 




I get it.  Newspapers have to write negative stuff to pay salaries.  Nobody wants to buy a newspaper with this headline:


8% Of All U.S.-Mexico Remittance Now Goes Over Bitcoin

Millions Of Migrants No Longer Have To Work A Month

To Pay Their Remittance Company


(This is true.  Our portfolio company in Mexico called Bitso is already serving two million people – saving them a month’s wages every year.)


It’s way easier to sell newspapers with FUD like this:


Researchers At Cambridge University Estimate That Mining Bitcoin

Uses More Electricity Than Entire Countries Like Argentina Do


— Hiroko Tabuchi, In Coinbase’s Rise, a Reminder: Cryptocurrencies Use Lots of Energy, The New York Times, April 14, 2021


The essence of good writing is distilling complex issues into tight sentences.  Oscar Wilde was a master.  The sentence that followed that New York Times headline really captures it:


“All this accounts for so little of the world’s total transactions, yet has the carbon footprint of entire countries.  So, imagine it taking off — it’ll ruin the planet.”


— Camilo Mora, The New York Times, April 14, 2021


Yes, that’s our Camilo Mora from above – still being paid by the University of Hawaii at Manoa to spew nonsense.  In just one sentence the author was able to get so much that is important backward.  It’s very useful in highlighting some of the chief fallacies that Bitcoin skeptics promote.


The number of transactions is totally irrelevant.  This academic has the causality completely backward.


Every ten minutes a fixed number of bitcoin are issued.  That’s it.

It doesn’t matter if every Starbucks transaction on Earth went over Bitcoin.  

It doesn’t matter if every Chinese Bitcoin miner got unplugged. 

There’s no Greenspan Put if the housing or stock market crashes.

Global pandemic?  Doesn’t matter.

Every ten minutes 6.25 bitcoins are issued.  That’s it.  


It was originally 50 bitcoins every ten minutes.  Every four years the number is cut in half.  In 2012 it went to 25 bitcoins.  2016 to 12.5.  Last May it halved to 6.25 bitcoins every ten minutes.  


This “halving” is a mega-important point to which we will return.


Satoshi couldn’t have made it any simpler.  


Every ten minutes 6.25 x $40,000 = $250,000 worth of bitcoin are issued.


So, every ten minutes miners spend, on average, $250,000 on chips and electricity.  (Capitalism is a thing of beauty.)  


Annually that adds up to $13.1 billion.  That’s it.  That is all the money available to buy energy and chips.  That’s what drives, and thus caps, electricity consumption. 


If the entire world switched to Bitcoin today, it would have absolutely no impact on energy consumption, much less “ruin the planet”.




This elegant simplicity forces those who have an ax to grind to really work at it to overcomplicate and obfuscate reality.  And obfuscate they do.  Here’s one example:



Overcomplicating to the point of complete obscurity.  First, all the parameters of Bitcoin miners’ businesses are unknowable.  These actors in a hypercompetitive sector must hide all their data, like rig efficiency, to stay a razor’s edge ahead of the competition.  


Assuming the same emissions from Bitcoin as from legacy industries and transportation is both wrong now and really wrong 100 years out.  Assumptions that Bitcoin miners use the same energy mix as the wider economy is provably false today.  Extrapolating that out for 100 years is silly.


We already know that today’s fuel types are very different than society as a whole and over time will skew much more to trapped and renewable energy sources.




Simplicity is best.  Simplicity works in one energy formula:


E = mc2


The Bitcoin energy formula is equally simple.


The two main ingredients for making aluminum are alumina and electricity.  Similarly, the two main ingredients for making bitcoin are silica and electricity.  The main costs miners pay are for silica chips and energy.


Recipe For Making Bitcoin

2 parts hardware

3 parts electricity


We use this formula to build our estimates of electricity consumption.  Over time miners will spend 60%3 of the value of newly issued bitcoins (the block reward) on electricity.


Thus, the energy formula for Bitcoin is:  


E = 6.25 * $/BTC * 60%


The energy consumed in Bitcoin is, on average, equal to the value of the 6.25 bitcoins issued times the percentage of miners’ total cost which is spent on energy (60%).


This simple formula – using a 90-day trailing average of the price – yields a very good fit of electricity consumption.



Inserting today’s numbers:


E = 6.25 x $40,000 * 60% = $150,000


Miners would be able to spend 60% of that or $7.9 billion on electricity annually. 


60.19%, Bitcoin Energy Consumption Index,  https://digiconomist.net/bitcoin-energy-consumption/




As an aside, the amount of misinformation out there is hysterical.


In reading an academic paper debunking the Mora et al paper cited above, I was floored by how many logical mistakes were in there too.


“History has shown that poorly constructed scenarios of future IT energy use (often a result of overly simplistic extrapolations of early rapid growth trends) can spread misinformation and drive ill-informed decisions.


[Editor’s Note:  Amen!  I’m worried that unchecked misinformation might cause bad policy decisions here.]


“Second, all three Bitcoin adoption scenarios designed by Mora et al represent sudden and improbable departures from historical trends in Bitcoin transactions.


— Nature Climate Change, Implausible Projections Overestimate Near-Term Bitcoin CO2 Emissions, September 2019


Again, the wrong concept is that the number of transactions has anything to do with energy consumption.  Energy consumption is solely a function of the price of bitcoin.




We’ve just concluded an experiment to prove that electricity consumption is not in any way related to the number of transactions.


Bitcoin mining/electricity consumption has just seen the largest drop in history.  The single largest negative difficulty adjustment was on July 3rd – dropping 28%.  Adjustments occur every two weeks and the cumulative peak-to-trough drop since May is 45%.



We just unplugged half of all mining power globally and, NOTHING happened — no change in the number of transactions, security, nothing.  


If Mora was right that increasing energy use was going to ruin the planet – having just seen energy consumption cut by more than half, we should be enjoying world peace by now.


Every four years the Bitcoin halving will do that same thing — remove half of mining/energy consumption.  We’ll return to this wonderful fact later.




Another way to prove energy is a function of price is to run a polynomial regression.  


The R2 of this regression is 79.7%.  (R-squared is the proportion of the variation in the dependent variable (energy consumption) that is predictable from the independent variable (bitcoin price)). 


I’ve run a million regressions in investing over the decades.  Almost none have been so conclusive.  


Bitcoin Energy = f (price)


Difficulty = 0.212 p3 – 28,640 p2 + 1332521844 p


R2 = 79.7%


It is very comforting that both of our energy models yield very similar results.





Energy is a function of price


The polynomial regression proved that difficulty is a function of price


By the transitive property:


Electricity = Difficulty


We’ll use those terms interchangeably – difficulty/electricity.




Plotting actual difficulty against our regression shows a very tight fit.


That polynomial regression clearly shows an outlier.  


“One of these things is not like the others.”


— Sesame Street




Chinese policy is definitely shutting down mining in China.  Our models show that up to 56% of the change could not be explained by price alone.  56% of a 45% drop is 25% of the previous total hardware power has been shut in by policy action.


The fallout of this ban was a significant outside context event (p<0.00001).  


Command economies can shut in capacity by edict.  Not in the free world.  Bitcoin mining is hyper-competitive.  The void will be replaced – and probably very quickly.  Here we’ve graphically represented it as three months. 



The shaded area of shut-in mining capacity is worth $2.0 billion annually.  (25% of the $7.9bn above.)


That “free money” will be soaked up with mining rigs outside of China.




Forecasting exponentially upward-sloping increases in consumption to the point of boiling the Earth may sell newspapers and get academic grants, but it’s not right.  (Nor is that axis.  The year 2100 comes twenty years after 2080 – not the year 3000!)



Forecasting Bitcoin energy consumption is easy.  


At a constant bitcoin price, one can forecast the amount of electricity Bitcoin consumes in any year in the future with incredible accuracy.  It’s already known.


If prices hold steady, the annual block reward would be $13.1 billion for the next three years.  Miners would be able to spend 60% of that, or $7.9 billion, on electricity. 


Our energy formula above:


E = 6.25 * $/BTC * 60%


Every four years the amount of bitcoin issued gets cut in half.  In 2024 the energy formula will be:


E2024 = 3.125 * $/BTC * 60%


After the 2024 halving, miners will only have half today’s amount – $3.9 billion – to spend on electricity.


Ceteris paribus, the amount of electricity Bitcoin consumes will be cut by 50% every four years.  For comparison, the Paris Accord only requires 7% cuts every four years.


Of course, I am not suggesting that the price of bitcoin holds at $40,000 permanently.  From a conceptual standpoint though, halvings will force a 50% reduction from whatever level would otherwise exist.


Perhaps a more realistic scenario is if the price of bitcoin were to double every four years in parallel with the halvings – putting bitcoin at $320,000 /BTC in 2032 – electricity consumption would be no greater than it is today.  


At that point it will probably be almost exclusively renewable/trapped – like hydroelectric, gas flares, geothermal, remote hydrocarbon deposits, etc.





The energy intensity of other blockchains and the blockchain industry as a whole is already declining.  It is well known that Bitcoin uses electricity to provide security.  That consensus mechanism is known as Proof-of-Work.


Most newer blockchains do not.  They use other consensus mechanisms which do not consume electricity.  The most popular is Proof-of-Stake.  Proof-of-Stake is basically one-share-one-vote, like in corporate securities.


In the early days, Bitcoin was the only blockchain.  So, 100% of the blockchain industry was energy-intensive Proof-of-Work.  In 2012, alternative consensus mechanisms which don’t consume electricity – like Ripple – came out.  They now represent 34% of the industry.


In early 2022, Ethereum will transition from Proof-of-Work to Proof-of-Stake, bringing along smart contracts and ERC-20 tokens that represent significant value in the blockchain ecosystem.


After that change, 57% of blockchain market cap will not be energy-intensive.






The recent ESG uproar has spent an inordinate amount of energy discussing the E in ESG, which is certainly an issue that shouldn’t be taken lightly.  But the conversation shouldn’t end there — it’s important to dig deeper into blockchain’s relationship with the other two-thirds of the acronym.  In our view, the total effect is unequivocally positive.


First, blockchain is a powerful tool for achieving social objectives. To take one example, the open finance revolution underpinning many of today’s DeFi innovations is designed to “bank the unbanked” and give users financial autonomy. While there’s much more work to be done on this front, early use cases — such as offering lower-fee remittances for families across borders and banking pro-democracy activists in hostile nations and — are beginning to deliver on this promise. As the ecosystem’s building blocks continue to mature, new pro-social applications will be enabled by the blockchain, from highly efficient charities to seamless carbon offsets.


Second, the concept of governance is being radically challenged in a way that, we believe, is positive for everyone involved. For one, transparency and on-chain accountability are an integral part of the DNA of many of the space’s most successful projects; traditional concerns around corruption and shady behavior can be simply validated by globally accessible information. Many projects are even taking this concept of radical openness and “rules without rulers” to its logical conclusion by organizing themselves as a decentralized autonomous organization (DAO) instead of a traditional corporation. This idea is no longer theoretical: Uniswap, a leading project with over $20 billion in market capitalization, effectively operates as a DAO. Moving forward, blockchain will give entrepreneurs across all industries new tools for approaching governance. The result will be projects that have stronger incentive-alignment between participants, promote a more meritocratic process, and optimize for longevity.


The S and G portions are true strengths of blockchain—through decentralized governance, expanding financial access, etc.—that often are de-emphasized in ESG discussions. 




Those who wish to spew Fear-Uncertainty-Doubt focus entirely on just one letter in ESG.  Any serious, full-spectrum ESG analysis of blockchain will conclude that blockchain is wonderful for ESG.  Blockchain will provide such wonderful benefits to billions of people.


“To some extent, the energy consumption in Bitcoin is a real issue.  You can have intelligent debates about how much is renewable.  I’m fine with that.  I feel like the new ESG thing, which you didn’t hear a year ago, might be because we’ve crossed everything else off the list.  Right?  There was the Silk Road guy using Bitcoin, and we crossed that off the list.  There’re no custodians that are regulated, we crossed that off the list.  What’s the CFTC going to do?  What’s the OCC going to do?  We crossed all these other things off the list.  You’re kind of left with ESG.  What about that one?  I think that is part of it.  Let’s focus a bit more on the S and G, not exclusively the E.”


— Dan Morehead, Penn Blockchain Conference, April 23, 2021






  • Diversity and Equal Opportunity – the essence of Bitcoin is it’s permissionless.  Anybody with a smartphone can participate.  3.5 billion people have equal opportunity.

  • Poverty and Community Impact – migrants no longer forced to pay a month’s wages a year to their remittance company

  • Freedom of Association – permissionless access is the ultimate freedom of association




  • Code of Conduct and Business Principles – its code is code!

  • Transparency and Disclosure – the code is open source and every Bitcoin transaction that has ever happened is published every ten minutes to anyone who wants to view it.  Literally can’t get more transparent.

  • Board Diversity and Structure – anyone with a smartphone can participate, the ultimate diversity and inclusion

  • Stakeholder Engagement – each blockchain community has complete control of their project

  • Shareholder Rights – all rights are enshrined in code





Even the appropriate amount of energy consumption of Bitcoin is a non-obvious question.


Nic Carter said it well:


“According to the Cambridge Center for Alternative Finance (CCAF), Bitcoin currently consumes around 110 Terawatt Hours per year — 0.55% of global electricity production, or roughly equivalent to the annual energy draw of small countries like Malaysia or Sweden. This certainly sounds like a lot of energy. But how much energy should a monetary system consume?


“How you answer that likely depends on how you feel about Bitcoin.  If you believe that Bitcoin offers no utility beyond serving as a Ponzi scheme or a device for money laundering, then it would only be logical to conclude that consuming any amount of energy is wasteful.  If you are one of the tens of millions of individuals worldwide using it as a tool to escape monetary repression, inflation, or capital controls, you most likely think that the energy is extremely well spent.  Whether you feel Bitcoin has a valid claim on society’s resources boils down to how much value you think Bitcoin creates for society.”


— Nic Carter, How Much Energy Does Bitcoin Actually Consume?, Harvard Business Review, May 5, 2021




I can imagine a day when billions of people use Bitcoin and other blockchains.  


  • Billions of people now have their savings protected from constant devaluation, bank failures, government seizures

  • Migrants no longer work for a month to pay their remittance company

  • The average restaurant almost doubles its profit margin/stays alive because it is no longer forced to hand almost half of its profit to the credit card duopoly

  • Billions of workers join the global economy by being paid in borderless cryptocurrency

  • Voters have certainty their vote is counted — because they can see it on the blockchain 

  • Refugees get 100% of the aid intended for them — not the scraps left over after most is stolen

  • Financial inclusion brings billions into the world of secure money, savings, and investment


Satoshi bequeathed all this to society — open source, not patented, and has never used a dime for his/her/its own profit.  


Blockchain is unambiguously good.


Someday we’ll look back and wonder:


“Wasn’t that time in the Twenties really weird when people were pushing the agenda that blockchain was BAD for ESG?!?!?!?”





We’re wrapping up a strong initial closing of Pantera Blockchain Fund – with over half of our target done in the first three months of a twelve-month fundraise. 


To accommodate new investors, our next close will be September 30th.  We will likely have subsequent closes on December 31st and March 31st, 2022.


We believe this new fund is the most efficient way to get exposure to the blockchain asset class.  It is a continuation of the strategies we have employed for eight years across eight venture and hedge funds which have collectively generated an average IRR of 104%.



As in previous Pantera venture funds, a Co-Investment Class is offered.  Limited Partners investing $15mm or more will have the option to collectively co-invest at least 10% of each venture and early-stage token deal.


The summary of terms can be found here.


Capital calls will be at fiscal quarter ends, with 40% of commitment due at the September close, and the balance called quarterly thereafter.


Click the button below to begin the investment process online.



If you are interested in exploring this opportunity further, please email ir@panteracapital.com.


Also, please join us for our Pantera Blockchain Fund call on August 10th at 9am PDT.  You can register here.





The blockchain fund industry in the United States began eight years ago.  Pantera Bitcoin Fund’s lifetime return is 53,131% net of fees and expenses. 


Pantera Bitcoin Fund provides institutions and high-net-worth individuals quick, secure access to large quantities of bitcoin – without the burdens of buying and safekeeping them.  The Fund features daily liquidity, no premium to NAV, and very low fees (0.75% management fee and no performance fee).


Despite offering daily liquidity with no lockup, most of our investors share our view that Bitcoin is like a long-term venture investment.  The average holding period thus far has been 619 days.



The minimum investment is $100,000.  You can click the button below for more information about investing.






“Pantera’s Morehead Scores Big Payoff on Bets Beyond Bitcoin”, by Sonali Basak, June 22 2021


“Dan Morehead, a veteran Bitcoin investor, is making more money at his hedge fund firm by diversifying beyond the most popular cryptocurrency.


“’If you’re just long Bitcoin, it’s kind of like in the 90s being just long Yahoo — you know, there were 30 other really important companies to invest in,’ Morehead, the head of Pantera Capital Management, said in an interview at the Qatar Economic Forum, Powered by Bloomberg. ‘Now there are literally 100s of tokens that are liquid enough to trade.’


“Pantera’s liquid-token fund soared 166% this year through June 20, compared with a 24% gain for Bitcoin in the same period. Morehead, in the interview taped Friday, said he’s also investing in Audius, which he says is similar to a “decentralized SoundCloud” because it allows users to send audio files while using the Ethereum network.  Polkadot is another of his crypto investments.


“The Pantera founder was an executive at Julian Robertson’s Tiger Management earlier in his career, and is now part of a handful of power players in crypto. Morehead said crypto will create a parallel financial system, with blockchain and decentralized finance, or DeFi, connecting buyers and sellers of assets without a bank. Morehead’s firm has $3.2 billion under management, according to its website, and launched its first fund in 2013, when Bitcoin was still $65, compared with more than $32,000 on Monday.


“Morehead was joined in the conversation by Mike Novogratz, the founder of Galaxy Digital, who said crypto is a rare investment that’s become truly global and has the potential to overtake some currencies in the next five years.


“Novogratz said that worries about currency debasement will fuel more crypto adoption.


“’There are already two hundred currencies on earth, Bitcoin is just number 201,’ Morehead said, adding that the U.S. dollar is unlikely to be replaced, but a currency such as the Venezuelan bolivar could be in his lifetime. But mostly, ‘you’ll just see it as a complement.’”


— Dan Morehead, Qatar Economic Forum, Powered by Bloomberg, June 22, 2021





Our (vaccinated) Capital Formation partners and occasionally investment team members are now traveling to discuss Pantera Blockchain Fund and the blockchain ecosystem with our Limited Partners and potential investors.


We also have organized Blockchain Lunches in some cities, should you want to learn more about blockchain and meet other investors who share your interest.  If you are interested in attending one of our Blockchain Lunches, please fill out the form on this page and we will be in touch regarding availability.


  • Cincinnati, August 9 | including a Blockchain Lunch at 12pm

  • Nashville, August 10

  • Austin, August 25 |  including a Blockchain Lunch at 12pm

  • Atlanta, September 1  |  including a Blockchain Lunch at 12pm

  • Seattle, September 8  |  including a Blockchain Lunch at 12pm

  • New York City, September 13-16

    • September 15 & 16, Blockchain Lunches at 12pm

  • Madrid, September 16

  • Barcelona, September 17

  • Amsterdam, September 20-21, 23

    • September 20, Blockchain Lunch at 12pm

  • London, September 22  |  including a Blockchain Lunch at 12pm

  • Zurich, September 24  | including a Blockchain Lunch at 12pm


If you are interested in a meeting, please contact the Pantera Capital Formation team at +1-650-854-7000 or ir@panteracapital.com. 



Have a nice August,





“Put the alternative back in Alternatives”



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 for via this link.


Pantera Blockchain Fund Launch Call [A detailed dive into our new “all-in-one” blockchain fund.]

Tuesday, August 10, 2021 9:00am PDT / 18:00 CEST / 12:00am China Standard Time (Aug 11th)


Pantera Funds Overview Conference Call [A discussion of the blockchain opportunity set and how Pantera’s four funds are structured to capture value in this rapidly evolving ecosystem.]

Tuesday, August 17, 2021 9:00am PDT / 18:00 CEST / 12:00am China Standard Time (Aug 18th)




Circle Goes Public at $4.5 Billion Valuation


Circle provides payments and treasury infrastructure for internet businesses via public blockchain and stablecoin infrastructure, namely USD Coin (USDC).  USDC originated as a joint project by Circle and Coinbase and is currently one of the most widely-used stablecoins, with over $25 billion in circulation and $640 billion in on-chain transaction volume across 180+ countries. Circle’s API services enable apps and businesses to build on top of USDC-powered rails and seamlessly embed blockchain-based payments, payouts, and account capabilities, alongside partners like Visa and Coinbase. 


Circle recently announced their public listing via a SPAC merger with Concord Acquisition Corp., valuing the company at $4.5 billion.  Pantera previously participated in Circle’s funding rounds in April 2014 and May 2018.


Investing in Risk Harbor and DeFi Risk Management


Risk Harbor is a capital-efficient risk management marketplace for DeFi protocols.  Roughly $50 billion worth of assets in DeFi is currently uninsured from risks of DeFi-related hacks or attacks.  Risk Harbor provides parametric insurance to protect liquidity providers and stakers from the financial impact of these attacks.  Their smart contract-based approach removes intermediaries from the claims process and enables faster payouts.  Risk Harbor currently has $2 million in liquidity in its claims pools.  Pantera co-led Risk Harbor’s $3.25 million Seed round in June 2021.


Amber Group Raises $100 Million for Global Expansion


Amber Group is a full-service crypto finance platform based in Hong Kong, providing trading and asset management services to institutional and retail customers.  Since the beginning of 2021, Amber’s cumulative trading volumes have doubled from $250 billion to over $500 billion.  The company recently raised $100 million in a Series B funding round at a pre-money valuation of $1 billion from China Renaissance and Tiger Global Management, with Pantera participating as a previous investor.  The funding will help expand operations globally, in order to meet customer demand and develop new solutions.  Pantera previously led a $28 million Series A funding round for Amber Group in February 2020. 


Investing in Parallel Finance and DeFi on Polkadot


Parallel Finance is a decentralized lending protocol built on the Polkadot ecosystem.  The protocol plans to offer zero-collateral, fixed-rate loans and staking derivatives, in addition to interest rate swaps and a decentralized credit rating system.  Parallel’s approach is uniquely suited to support Polkadot’s network security by enabling users to borrow against their staked Polkadot assets via staking derivatives.  Pantera led a $2 million Seed round for Parallel Finance in June 2021, with participation from Lightspeed Venture Partners, Breyer Capital, Polychain Capital, and others.




For those that want to read more about blockchain ESG, here are some good papers.