Pantera Capital highlights investment strategies

Investing in cryptocurrency tokens presents significant challenges and risks. 

Cosmo Jiang, a portfolio manager at Pantera Capital, emphasises the necessity of fundamental analysis for successful investments in this volatile market. 

“If investments in this industry are not supported by fundamental analysis, it only means we have failed,” he warns, stating that neglecting this approach can lead to substantial losses.

Jiang manages nearly $5 billion in assets and focuses on publicly traded tokens. 

When assessing potential investments, he prioritises product-market fit and the capabilities of the teams behind these projects.

In his recent analysis, Jiang compares Solana (CRYPTO:SOL) and Ethereum (CRYPTO:ETH), noting that Solana has shown stronger growth in daily active addresses over the past six months. 

“User growth determines the true value of a token,” he believes, stating that user growth is a crucial indicator of a token's true value.

In the last 30 days, Solana’s revenue surged by 180%, while Ethereum’s increased by 37%. 

Despite Ethereum's market capitalisation being four times that of Solana, Jiang sees potential in Solana's rapid growth.

Jiang also expresses interest in decentralised physical infrastructure networks (DePIN), which leverage blockchain technology for real-world applications. 

He cites projects like Render Network and Arweave as examples attracting investor attention, remarking, “DePIN projects attract investors because they operate as real-world businesses.” 

While he remains skeptical about meme coins, Jiang prefers to invest in projects that facilitate meme coin trading.

Looking ahead, he predicts that while his investment strategy may not achieve a 132% return on Bitcoin ($100,516) in 2024, he expects higher returns as blockchain technology becomes more widely adopted. 

Jiang believes that multi-year compounded investments in crypto will ultimately succeed as infrastructure providers grow and evolve beyond Bitcoin.