Partners at Pantera Capital: Our 10-year journey and future strategy for Ethereum

By: Paul Veradittakit

Translated by: Shenchao TechFlow

### Key Summary

As it enters its second decade, Ethereum is establishing itself as the foundational layer for stablecoins, DeFi, and tokenized assets.

Digital Asset Treasuries (DATs) are reducing token circulation and driving institutional demand for ETH, thereby creating structural price support.

With regulatory clarity and reforms by the Ethereum Foundation, Ethereum will gradually become the core infrastructure of on-chain capital markets, enabling long-term growth.

### The Origin of Ethereum's Vision

Before creating Ethereum, Vitalik Buterin was an early supporter of Bitcoin and worked at Bitcoin Magazine. There, he realized that Bitcoin lacked scripting capabilities and could not meet the needs of application development. Thus, he put forward a bold vision: to build Ethereum with a universal scripting language, designed as a computer running on a decentralized, permissionless network. This idea was extremely avant-garde at the time and aroused a lot of doubts—after all, it was just a young man without the backing of large companies trying to create a brand-new technical system.

However, the key that changed the perspective of many early investors was that more and more applications chose to be built on Ethereum rather than Bitcoin and its Layer 2, indicating that Ethereum is more suitable for application development. One of the first "killer applications" to verify this view was Augur, a decentralized prediction market. Augur demonstrated Ethereum's great potential: it can support powerful applications based on transparency, automation, and financial logic, while allowing developers to issue tokens, coordinate governance, and raise funds natively, which directly gave birth to the ICO (Initial Coin Offering) boom.

### Ethereum's Decade

Ethereum is celebrating its 10th anniversary and is enjoying a long-awaited moment of glory.

Since its launch in 2015, Ethereum has pioneered with programmable smart contracts, gathered a community of developers, and laid the foundation for fields such as DeFi, games, and NFTs. Over the past decade, this ecosystem has continued to innovate, not only hosting most DeFi protocols but also becoming a core pillar of stablecoins. As the stablecoin infrastructure matures, the introduction of the GENIUS Act has brought regulatory clarity, while also introducing royalty income to Ethereum and boosting its demand.

Although stablecoins such as USDC and USDT exist on multiple chains, Ethereum remains the leading platform for stablecoin activities, accounting for nearly 50% of the global stablecoin market capitalization. Ethereum's strong ecosystem continues to drive price growth under the impetus of stablecoin adoption and innovative scaling solutions, and Pantera Capital's strategic investments have further boosted this growth momentum.

### Pantera's Investments in the Ethereum Ecosystem

Over the past decade, Pantera Capital has continuously invested in the Ethereum ecosystem, supporting transformative projects and founders, and is closely linked to Ethereum's growth. Key investments include:

- Circle: The driving force behind USDC, with a market capitalization of over $60 billion, promoting the widespread adoption of Ethereum in DeFi and payment fields.

- Arbitrum: A leading Layer 2 solution, which captured 100% of Ethereum's new transaction growth in 2023, with transaction speed increased by 40 times and cost reduced by 20 times. It has processed more than 1.89 billion transactions, and the trading volume of decentralized exchanges has exceeded $545 billion, demonstrating Ethereum's scalability.

- Ondo: It has performed brilliantly in the multi-billion-dollar tokenized asset management market. In 2023, it launched USDY, connecting real assets such as U.S. Treasuries with on-chain finance, strengthening Ethereum's role as a core infrastructure.

- Morpho: Optimizing the lending experience on Ethereum, with a deposit scale approaching $1 billion within one year of launch, becoming one of the fastest DeFi protocols to reach this milestone.

- Bitwise: Pantera provided early funding support for its spot Ethereum ETF, which became one of the first approved ETFs, attracting institutional capital inflows. By 2025, Bitwise manages assets exceeding $4 billion, using the Ethereum blockchain to drive DeFi and tokenized asset strategies.

- BitMine and other enterprises: Together with companies such as Bit Digital, they added more than 840,000 ETH to corporate treasuries, highlighting the value of Ethereum as a reserve asset.

Through strategic investments, Pantera Capital has promoted Ethereum's core position in on-chain finance, scaling solutions, and real asset linking, helping the continuous development and innovation of its ecosystem.

### Institutional Demand, Digital Asset Treasuries, and Changes in Ethereum's Supply Pattern

Ethereum surged by 53% in July. This strong rise of Ethereum is not due to speculation but is driven by structural factors: institutions increasing their exposure to ETFs and Digital Asset Treasuries (DATs), the transformation of the Ethereum Foundation, and the recent clarification of the regulatory environment.

Institutional interest in crypto assets is focused on the fields of ETFs and DATs. Last week, U.S. spot ETH ETFs attracted $1.8 billion in capital inflows, while DATs also began to hoard ETH on a large scale. SharpLink (SBET) increased its reserves to 361,000 ETH, and BitMine's Ethereum holdings exceeded $2 billion in just 16 days. As mentioned by Tom Lee of MicroStrategy and Cosmo Jiang of Pantera in a conference call, these asset management companies have built-in advantages: low-cost capital, equity premiums, staking income, merger arbitrage, and operating income, so that each new stock issuance can increase their ETH holdings per share. This unique structure continuously reduces the circulation of Ethereum, providing price support beyond simple demand.

Source: https://www.coinglass.com/eth-etf

DATs are no longer a novelty in the crypto-native field but an entry point for institutional investors to get involved in cryptocurrencies and Ethereum, allowing them to gain exposure before purchasing spot goods or conducting on-chain transactions. As mentioned in my previous blog "Blockchain Publicization: The Integration of Public Markets and Digital Assets", these tools concentrate huge purchasing power, often absorbing more ETH than issued, promoting scarcity, and triggering a broader capital rotation into other altcoins.

### Regulatory Clarity and the Strategic Shift of the Ethereum Foundation

Improvements in the regulatory environment are turning past resistance into impetus. In July this year, the GENIUS Act granted federally chartered status to regulated payment stablecoins. Stablecoins have quietly become a killer application of cryptocurrencies, with a circulation exceeding $250 billion, among which Ethereum settles about half of the global tokenized U.S. dollar transfers.

At the same time, the new leadership and rapid development of the Ethereum Foundation (EF) are also promoting the rapid iteration of the chain. This transformation includes leadership restructuring, adjustment of the protocol team structure, strict treasury policies, and an accelerated technical roadmap to address community criticisms about efficiency, transparency, and competitiveness. By focusing on Layer 1 expansion, Blobspace (data storage space), user experience (UX) optimization, and DeFi integration, it aims to consolidate Ethereum's leading position in institutional adoption (such as Robinhood's stock tokens on Arbitrum) and blockchain competition (such as Solana). Despite ongoing challenges such as talent retention and community expectation management, EF's strategic transformation has laid the foundation for Ethereum to seize opportunities in the on-chain migration of capital markets, such as the emergence of innovative cases like Robinhood Chain and Pantera's ecological investments.

### Final Thoughts

Stablecoins have finally locked into a reliable track, reinforced by the regulatory clarity of laws such as the GENIUS Act, thus boosting their demand. And digital asset treasuries are the engine behind this demand. They absorb market circulation, push up prices, and provide institutions with a one-stop solution for holding crypto assets. In today's market where more emphasis is placed on structural returns, tokens with deflationary pressure and linked to real cash flows will become ideal underlying assets for DATs. This trend will further drive up the price of Ethereum, and the demand for the Ethereum blockchain will also surge accordingly.

We are at a critical moment of major infrastructure transformation. This transformation does not require a magic bullet but a series of solutions that can solve many difficult problems. At Pantera Capital, we are always committed to investing in solutions that can empower the next stage of on-chain capital markets, simplify financial infrastructure, and expand the horizons of blockchain innovation. Ethereum is at the center of this transformation. It is a core pillar of stablecoins, a preferred platform for institutions, and a catalyst for the continuous development of the digital asset economy, leading the industry towards a brand-new future.

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