TechFlow News — Multicoin Capital, a crypto investment fund, shared a letter to investors this Thursday from partners Kyle Samani and Tushar Jain, outlining the firm's current status and market outlook. TechFlow summarizes the key points below:
1/ The collapse of FTX and the resulting market downturn have reduced Multicoin’s assets under management by 55% this month.
2/ We placed too much trust in our relationship with FTX, holding too many assets there. Multicoin typically trades across three exchanges—FTX, Coinbase, and Binance. Now, aside from assets lost on FTX, 100% of our holdings are either on Coinbase or in self-custodied wallets.
3/ We do not expect a quick positive turnaround in the cryptocurrency market. We anticipate that the fallout from FTX/Alameda will continue spreading over the coming weeks, leading to further collapses among crypto firms, adding greater pressure on liquidity and trading volumes across the entire ecosystem.
4/ As other companies tied to FTX seek emergency funding, we aim to acquire mispriced assets at more attractive valuations.
5/ Multicoin remains steadfast in its convictions and continues to believe in Solana, which has one of “the most active developer communities.” Based on our experiences in 2018 and 2020, selling assets during short-term crises is unwise if the core investment thesis remains intact.
6/ Just as the collapse of Lehman Brothers did not kill banking, nor Enron’s bankruptcy mean the end of energy companies, FTX will not mark the end of crypto. As leverage is purged from the system, we expect new growth to emerge next year. We know this industry—and the builders in our portfolio—are among the most dedicated people who won’t give up, and neither will we.
