Morehead could have gotten into cryptocurrencies even earlier, in 2011, when his brother introduced him to Bitcoin. He read about it some, thought it was a cool idea and then pretty much forgot about it.
‘Garbage Collector’
Then, two years later, Briger summoned him to Fortress’s San Francisco offices to discuss Bitcoin, along with early crypto evangelist Mike Novogratz. Briger, 58, a distressed-debt specialist who describes himself as a “garbage collector” of the financial system, saw Bitcoin as having the potential to disrupt traditional banking.
“Blockchain is a game-changer in financial services,” Briger said. “It pressures the banking and payments industry to rethink their reliance on legacy barriers to protect competitive advantages.”
After the meeting, Morehead pledged to do additional research, and a month later he told Briger that crypto was the most exciting thing he’d seen in his career. He set up shop in Fortress’s office and got to work on standing up a cryptocurrency investment fund.
In addition to the gains for the Pantera Bitcoin Fund, a venture fund that also debuted in 2013 has generated an internal rate of return of 51%, and Pantera’s Liquid Token Fund surged 385% in 2021 alone.
Fortress became one of Morehead’s biggest backers. Finding such an institutional investor during Bitcoin’s earlier days was an exception.
Most investors were “high net-worth individuals, particularly tech entrepreneurs and Wall Street executives that were investing their own money,” Morehead said.
Bypassing more traditional funding allowed Pantera to move quickly.
“One CEO of a tech company wired $2 million to the fund, and then a couple of weeks later called and said, ‘Hey, what are the terms?” Morehead recalled.
Morehead organized an annual Bitcoin conference at his Lake Tahoe home that he called Bitcoin Pacifica, attracting cryptophiles from around the world.
“They weren’t the kind of people I was used to meeting through Fortress,” Briger said of one meeting he attended. “A lot of fringe players, cypherpunks, cryptographers and probably some who’d call themselves anarchists.”
Tiger Management
It was a big change for Morehead, too. He had started Pantera as a traditional macro hedge fund—his specialty during four years as chief macro strategist and chief financial officer at Robertson’s legendary hedge fund, Tiger Management.
That first version of Pantera grew to about $1 billion of assets before the 2008 financial crisis. Now, as a pure crypto investor, it’s several times larger. The firm managed about $5.6 billion at the start of this year, including a fourth fund that raised $600 million in November.