Finance

Pantera Capital cashed out 80% of investment in Terra Labs before LUNA and UST crash


Pantera Capital, one of the high-profile investors in Terraform Labs, said it cashed out nearly 80% of its Terra (LUNA) investment well before TerraUSD (UST) collapse we saw last week, which took away over $40 billion in market capitalization away.

Joey Krug, co-chief investment officer at Pantera Capital, told The Block that, “The market has been fairly frothy over the last year and thus we’d exited the majority of our position before any of this happened. Roughly 80% over the last year, fairly gradually over time.”

Pantera Capital invested at least twice in Terraform Labs, once backing its $25 million round in January 2021 and then joining its $150 million ecosystem fund round in July 2021. Joey Krug clarified that Pantera’s LUNA investments were separate from its investments in Terraform Labs and took place in the summer of 2020 after LUNA’s market debut.

What you should know

Joey further stated, “We managed that position down over time as it became increasingly profitable/large, in order to maintain a diversified portfolio. We initially invested in LUNA because of the progress we saw in developer adoption, the payments usage, and the broader ecosystem being built on Terra.”

  • Since Pantera exited most of its investment early on, it generated a significant profit, according to Joey. Paul Veradittakit, a partner at Pantera Capital, told The Block that the venture capital firm turned $1.7 million investment into approximately $170 million.
  • Meanwhile, other venture capital firms that backed Terraform are reeling under losses since Terra’s native LUNA token has lost almost its entire value due to the UST crash.
  • An example will be Binance. According to a tweet thread by its CEO, Changpeng Zhao, the global exchange owned 15 million units of LUNA worth $1.6 billion at LUNA’s peak price but that investment is now worth $3,000.

The UST algorithmic stablecoin de-pegged sharply last week to levels below 10 cents, far from its target price of $1. It is still trading at that level as of the time of this writing. Meanwhile, LUNA is currently trading at a fraction of a cent, from approximately $120 from its all-time high it hit last month.

When Pantera noticed UST’s de-pegging last week, it sold more of its LUNA holdings from the remaining 20% investment. Joey explained, “We got out of 2/3 of that at an average price of $25.6. The remainder of that was staked via LUNAX and so unable to be sold.” LunaX is a liquid staking token by Stader Labs.



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