Crypto Investments: from speculation to professionalism, how Pantera Capital interprets the new course of venture capital

In the crypto venture capital ecosystem, market dynamics are undergoing a radical transformation. Pantera Capital partners, Paul Veradittakit and Franklin Bi, recently conducted an in-depth analysis of how the sector has shifted from the speculative euphoria of 2021-2022 to a more mature and rational investment model.

From years of metaverse hype to dominance of Bitcoin and Ethereum: when the market enforces selection

The 2021-2022 period marks a particular chapter in crypto history. With zero interest rates and abundant liquidity, the sector was swept by a wave of speculative investments: everyone was funding metaverse projects driven by alluring but poorly founded promises. Investors lacked the analytical tools to assess the true potential of these projects, leading to funding initiatives that should not have received capital.

Today, the landscape is radically different. The “altcoin bull market” has ended, and the market is dominated by Bitcoin, Ethereum, and Solana. This structural change has direct consequences: without retail enthusiasm for alternative tokens, capital flows increasingly from institutional and professional funds, with traditional due diligence translating investment strategies into higher quality standards. The total number of transactions has decreased by nearly 50% compared to previous years, but the average value per transaction has increased significantly. Additionally, traditional fintech venture capital firms have begun entering the sector with even more selective approaches.

The “two sides of the same coin” phenomenon: record funding but declining transactions

Over the past year, total funding in the sector reached a historic high of $34 billion, a figure that might seem contradictory given the decline in transaction volume. However, this apparent contradiction reveals a deeper truth: capital is heavily concentrating on late-stage projects, while seed and early-stage rounds have contracted significantly.

This reflects a paradigm shift in perceived risk and sector maturity. Investors have moved from a “spray and pray” strategy to a highly focused model. Selection has become the key word, driven by a more realistic understanding of which technologies and use cases can actually scale.

The crucial importance of exits: from TGE to public listings

One of the most significant structural changes concerns exit strategies. In the last two to three years, equity transactions have significantly surpassed token transactions, marking a transition from funding strategies via token generation events (TGE) to more traditional models.

Circle’s IPO represented a crucial turning point for the sector. For the first time, the public market welcomed a native crypto company, demonstrating a credible and verified exit path to venture capital investors. With examples like Figure, which operates in the tokenization of real-world assets, investors can now trace a clear line from seed rounds to stock listings, significantly reducing the perceived risk of the entire sector.

Digital Asset Treasury (DAT): when passive tools become active

The emergence of new structures like Digital Asset Treasury (DAT) represents an evolution in market sophistication. A DAT functions like a “financial machine”: it does not passively hold assets but actively manages them to generate yield, similar to how owning shares in an oil company creates value differently from direct ownership of raw materials.

Although the DAT market has recently cooled down, this does not mean extinction but rather natural selection. The market is learning to focus on the actual execution capacity of management teams, rather than mere speculation on the instrument. Only DATs managed by teams with proven track records in asset growth will survive.

Geographically, while the boom in the United States may be approaching a consolidation phase, Asia-Pacific and Latin America still have significant growth margins for these innovative tools.

The future of crypto venture capital: tokenization, zero-knowledge proof, and consumer applications

Looking ahead, there is a consensus on three pillars of growth.

Tokenization represents a trend that will last for decades and is just entering a serious operational phase. From 2015 to today, it took ten years for the concept to move from academic theory to implementation with real institutions and clients. While the first step involves “copy-pasting” assets onto the blockchain for efficiency and globalization, the true potential lies in the ability to program these assets via smart contracts, creating new financial products and innovative risk management models.

In this context, stablecoins are the killer application of tokenization. With increasingly clear regulation, stablecoins unlock the potential of “money over IP,” making global payments cheap and transparent. In Latin America and Southeast Asia, stablecoins are the main gateway for mass adoption of crypto technology.

Zero-knowledge proof technology, represented by innovators like Zcash and Starkware (on which JPMorgan has invested), will undergo massive scaling in the coming years. Blockchain suffers from the “garbage in, garbage out” problem: corrupted data at entry means compromised technology use. ZK-TLS technology will verify the authenticity of off-chain data (bank statements, transaction histories) and bring them on-chain without exposing the data itself. This allows behavioral data from apps like Robinhood or Uber to interact securely with on-chain capital markets, enabling innovative applications.

Consumer applications and predictive markets are another exploding frontier. From pioneer Augur to modern Polymarket, these tools allow anyone to create markets and bet on any topic, from corporate results to sporting events. The potential in terms of regulation, economics, and information discovery is enormous, making price discovery democratization possible on a global scale.

The on-chain capital markets paradigm is not a copy but a rewriting

It is crucial to understand that on-chain capital markets are not simply copies of traditional markets. In Latin America, many people make their first investment through platforms like Bitso without ever having bought stocks, but they could soon access complex derivatives like perpetual futures. This “generational financial leap” means they may never use traditional Wall Street tools again, perceiving them as inefficient and complex.

Open questions: token lock-up, L1 chains, and the future of exchanges

Regarding token lock-up periods, there is a recurring false premise: “I invested, so it must be worth.” The reality of venture capital is that 98% of projects end up at zero. The real determining factor is not the lock-up structure but the ability to create value. A reasonable lock-up period of 2-4 years remains necessary, giving teams time to develop the product and reach their goals.

As for the “wars” between public L1 chains, the phenomenon is not yet over, although the frenzy of previous years has subsided. Few new L1s will emerge, but existing ones will continue thanks to their communities and ecosystems. The focus shifts to how L1s can capture value, with priority fees determining competitive value: where on-chain activity exists, there is always a way to capture value.

Finally, the choice between exchanges like Coinbase and Robinhood remains open. Robinhood aims to become an integrated fintech platform controlling all phases from settlement to trading vertically, while Coinbase pursues a broader vision of bringing everyone on-chain, a goal that will take 10-20 years to develop. In the short term, Robinhood has demonstrated superior ability to rapidly launch new products and monetize.