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Solana Over Bitcoin: Pantera Capital's Scores 66% Gains Through Exposure to DeFi

Pantera Capital's Liquid Token Fund delivers strong performance

Pantera Capital, a prominent asset manager and early investor in the cryptocurrency space, has reported a remarkable 66% return for its Liquid Token Fund in the first quarter of 2024. According to a shareholder letter reviewed by Bloomberg, the fund's success was primarily attributed to investments in various crypto tokens, including Solana (SOL), Ribbon Finance (RBN), and Stacks (STX).

Interestingly, the fund reduced its exposure to Bitcoin (BTC) and Ether (ETH) during the same period. Portfolio manager Cosmo Jiang revealed that the fund's Bitcoin holdings have been cut by more than half since the beginning of the year, stating: 

"We'd been pretty heavy in Bitcoin until the start of the year, and I really like each month we've decreased that Bitcoin position meaningfully."

The Pantera Liquid Token Fund, which launched in November 2017, maintains a portfolio of 10-20 liquid tokens and primarily focuses on decentralized finance (DeFi) tokens. The fund is open to accredited investors who are willing to commit a minimum of $100,000.

Pantera Capital's recent investments and market trends

Pantera Capital, with $5.2 billion in assets under management, has recently made headlines for raising approximately $250 million to purchase SOL tokens from the now-defunct crypto exchange FTX. The tokens were reportedly acquired at $64, representing a 60% discount compared to the current market price.

The impressive performance of SOL, which has gained 69.88% year-to-date, has been linked to the rise in its blockchain market dominance and the ongoing memecoins frenzy. Memecoins such as Dogwifhat, Bonk, Cat in the Dogs World, and Book of Meme have been gaining popularity, further contributing to SOL's price appreciation.

Moreover, institutional investors have shown increased interest in SOL-based investment funds. In March, CoinShares reported that these funds received almost $25 million in inflows, further supporting the token's price rise.