The year was 2013 when a then alien concept adapted in the form of a digital currency hedge fund by Princeton alumnus Dan Morehead. This marked Pantera as one of the first hedge funds in the world based on cryptocurrency.

Morehead was not new to the business world, however. He had formerly been working at Goldman Sachs and had also been the Head of Macro Trading and CFO at Tiger Global.

That being said, even Morehead could not have exactly predicted what happened, when the hedge fund released its returns of no less than 25,004 percent.

Yes, that’s not a typo. It’s not a mistake. The returns are, indeed, 25,004 percent. But 25,004 is nothing when there are other reports of 85,000%. Yes, it’s a crazy time to be alive.

Dan Morehead and others who have stepped into this market at a time when many have shied away from it are being greatly rewarded for taking a calculated risk in the space. Dan Morehead, recently also stated that bitcoin experience a major correction before trending upwards again, and bitcoin did indeed experience a correction before it has come back to its current level of $16,000.

Bitcoin is largely credited for the gains

While the whopping percentage of the gains in this virtual currency fund would be a surprise, it would not be shocking for anyone to deduce that it’s largely due to Bitcoin. The premier cryptocurrency reached the $19,000 mark fairly recently. However, it should be noted that the fund’s 25,004 percent figure was compiled a week ago when Bitcoin was at $15,500.)

At the time of this writing, Bitcoin is trading at around $16,250.

Since 2013, the Pantera’s compound annual returns have been around 250 percent. Pantera did not have to take extensive measures to get those returns either. It largely just purchased Bitcoins and held them as the price went to rise up and above anyone’s expectations.

However, Morehead explains that focusing on a Bitcoin-focused hedge fund in 2013 was a difficult decision since the cryptocurrency was then widely associated with the dark web and illegal markets.

He noted in an interview with the New York Times:

“The first hard part was actually deciding to launch a cryptocurrency fund when everyone else thought that was crazy.”

The firm has experienced large growth

Pantera’s fund has made $2.1 billion for its investors in dollar terms, estimation suggests.

Pantera has kept its fundraising very limited and has opened up only to people who they believe qualify as sophisticated investors, such as investors who already have a substantial percentage of assets, investors who truly understand the risks associated with these allocations. The fund only accepts investments that start at an upwards of the  $50,000 dollar level.

According to the New York Times, investors had originally put around $150 million into the fund. That being said, investors have taken out Bitcoins worth around $1.7 billion to hold for themselves in order to avoid paying Pantera’s 0.75 percent annual fees. But even that action left Pantera with holding coins worth $400 million.

As per Morehead, one of the reasons why the fund gained so much traction is how it allows investors access to Bitcoin without going to Bitcoin exchanges, several of which have been hacked in recent years.

Pantera looks forward to further growth

The fund has expanded its portfolio into investing in other currencies like the highly controversial bitcoin cash or bcash, and also other virtual currencies (some recent that were minted via the vehicle of initial coin offerings and others have been hard forked) that the firm believes could rise over the course of time and provide similar returns.

While more than 150 hedge funds focused on virtual currencies have been created this year, starting one such fund in the air of 2013 does not seem like a walk in the park. That is one of the reasons why firms like Pantera and its leaders are able to receive significant returns and major cryptocurrency credit.