In a letter to its buyers, one of many trade’s most notable crypto enterprise corporations, Multcoin Capital, has revealed its thesis for the approaching weeks.
“Simply as Lehman Brothers didn’t kill banking and Enron wasn’t the demise of vitality firms, FTX gained’t be the tip of the crypto trade,” the enterprise capital agency mentioned.
On the identical time, the agency warns its buyers that FTX’s collapse will trigger extra fallouts. Samani and Tushar wrote:
We anticipate to see contagion fallout from FTX/Alameda over the subsequent few weeks.
Many buying and selling corporations can be worn out and shut down, which can put strain on liquidity and quantity all through the crypto ecosystem. We’ve got seen a number of bulletins already on this entrance, however anticipate to see extra.
In keeping with Multicoin, leverage should first be faraway from the system earlier than there can be “inexperienced shoots subsequent yr.”
Multicoin Trusted FTX
Samani’s firm additionally acknowledged its personal errors, although. Thus, it had positioned “an excessive amount of belief” in FTX. Because of this, Multicoin misplaced 15.6% of its complete fund belongings on FTX.
The enterprise agency was solely in a position to get better a few quarter of its funds that had been deposited on the alternate. Though ready to see how the chapter proceedings progress, the corporate expects to write down down its funding in FTX to zero.
In doing so, Multicoin follows the destiny of different buyers in FTX, similar to Temasek, Sequoia Capital and Softbank.
Because of the lack of confidence, Multicoin mentioned it is just buying and selling on two different exchanges, Coinbase and Binance. For now, nevertheless, the corporate solely depends on Coinbase custody and self-managed chilly wallets, it mentioned.
The Future Of Solana (SOL)
By its personal account, Multicoin has invested a big quantity in Solana (SOL). The token was one of many greatest victims within the FTX collapse, as SOL was one in every of FTX’s largest positions together with FTT.
On November 05, SOL was nonetheless buying and selling at a worth of $38.71 on Binance earlier than the steep crash to presently $13.53 occurred.
Regardless of the heavy losses, Multicoin formally nonetheless believes in Solana’s long-term potential, in line with its letter to buyers. The enterprise agency mentioned it’s holding its place and nonetheless expects a brilliant future for Solana, as a result of the cryptocurrency has “some of the vibrant developer communities.”
Based mostly on our expertise in 2018 and 2020, we realized that it’s not prudent to promote an asset throughout a short-lived disaster if the core thesis just isn’t impaired,” the letter states.
Nevertheless, there’s a juicy (unconfirmed) rumor circulating that Samani and Jain dealt with his private funds otherwise. Allegedly, the overall companions bought their private SOL stashes close to the highest.
Unconfirmed: LP states that Multicoin GPs bought their private SOL stashes close to the highest whereas refusing to promote for the fund and bull tweeting. They made lavish actual property and car purchases and have did not return needed $ to LPs for tax obligations.
Haters take notice pic.twitter.com/uPONWcods3
— Evanss6.eth (@Evan_ss6) November 17, 2022