Cosmo Jiang, partner and portfolio manager at blockchain investment firm Pantera Capital, stated in an interview that as the cryptocurrency industry matures, fundamental analysis will soon be valued again in the field, as the primary driving force behind the growth of the crypto industry will come from institutional investors, who typically pay more attention to the fundamental performance of projects.
Jiang believes that the situation of not needing to delve deeply into cryptocurrency investment targets cannot last forever. In an interview with (CoinDesk), he stated: "If this industry cannot introduce fundamental investment methods, it means we have failed. All assets will ultimately follow fundamental laws. For investors, the only thing that ultimately matters - this has been true for hundreds of years - is cash flow."
"The growth of cryptocurrency from zero to its current $3.4 trillion market value has relied on retail interest," Jiang said. "But for this asset class to continue to grow, the only way is to attract institutional capital. And institutional capital will only pay attention to fundamentals; logically, this will be the only way to achieve sustainable profitability in the future."
Pantera's asset management strategy
Jiang stated that Pantera currently manages about $5 billion in assets, with approximately 75% of the funds locked in venture capital instruments, and the remainder in liquid assets. As the portfolio manager of the company's liquidity token fund, Jiang focuses on publicly traded tokens in the market.
When it comes to selecting tokens to add to the fund's investment portfolio, Jiang looks at the product-market fit, focusing on cryptocurrency projects that develop products in areas with high demand. During the selection process, he considers two core questions: whether the team has the ability to achieve their vision and whether their token has the opportunity to capture part of the generated economic surplus.
"For anyone involved in traditional asset classes, this may sound somewhat foolish, as it is a common practice," Jiang said. "But in the crypto space, for whatever reason, this approach is not mainstream."
Layer 1 networks provide some of the most robust business models; smart contract platforms are relatively mature, generating revenue through transaction fees, and their token value will increase with the growth in network usage. Jiang is particularly optimistic about the native token SOL of the Solana blockchain and the TON token related to Telegram. However, Ethereum's ETH is no longer as attractive to him as it was in the past, as new users are no longer flooding into the network.
Jiang's attention is not limited to Layer 1 projects; he is also interested in blockchain sectors including decentralized physical infrastructure (DePIN) and meme coin trading platforms.
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Related articles: (Pantera Capital: The crypto sector is at a significant turning point similar to the stock market's development, and traditional valuation frameworks will be applied to digital asset investments)
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