Portfolio Director of $5 billion fund Pantera Capital believes DeFi market is undervalued

Episode 62 of Season 3 of The Scoop was recorded at the 2021 Mainnet Conference with The Block’s Frank Chaparro and Franklin Bi, Director of Portfolio Development at Pantera Capital.

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“We are heavily moving into DeFi.” 

Pantera Capital, the longest operating US-based bitcoin investment firm, now manages $5 billion worth of assets. But when it comes to decentralized finance, Pantera’s Franklin Bi still sees the space as undervalued.

“As long as we're still looking at the fundamentals and drawing out what the multiples are there, we're still not at the point where you know, you're really starting to see the speculative mania.”

On this episode of The Scoop, Bi, who is Pantera's director of portfolio development joined host Frank Chaparro to discuss the current state of venture capital investment in crypto and how he’s finding value in an increasingly crowding ecosystem.

“There's the crypto native side, which I think a lot of new investors coming into the space don't recognize yet. Things like staking, participating in the network, focusing on decentralized governance and how we play a role there. That's all stuff that looks super different from, you know, just showing up at a board meeting once a quarter to review the financials.”

Pantera has been investing heavily into DeFi since 2017, and is now ramping that up as more investors have started searching for sustainable yield instead of simply investing based on an interest in novel technologies. Bi has observed this shift in investor sentiment as traditional investors are slowly beginning to comprehend the margins of DeFi products. He argued that certain digital assets companies are still relatively undervalued when compared to public market counterparts.

“They're getting valued like traditional financial institutions, which to me, sounds like they're undervalued because the rate at which a DeFi project can grow is on a totally different scale. The profitability margin's totally different scale.” Bi went on to add, “It tells me that they're actually undervalued rather than overvalued.”

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