In a letter to its traders, one of many trade’s most notable crypto enterprise companies, Multcoin Capital, has revealed its thesis for the approaching weeks.
Managing companions Kyle Samani and Tushar Jain write in a 3,400-word letter that the FTX fiasco doesn’t spell doom for the crypto trade, as critics like Peter Schiff and Nassim Taleb not too long ago did.
“Simply as Lehman Brothers didn’t kill banking and Enron wasn’t the dying of power firms, FTX received’t be the top of the crypto trade,” the enterprise capital agency stated.
On the identical time, the agency warns its traders that FTX’s collapse will trigger extra fallouts. Samani and Tushar wrote:
We count on to see contagion fallout from FTX/Alameda over the subsequent few weeks.
Many buying and selling companies can be worn out and shut down, which can put stress on liquidity and quantity all through the crypto ecosystem. Now we have seen a number of bulletins already on this entrance, however count on to see extra.
In line 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. Consequently, Multicoin misplaced 15.6% of its complete fund property on FTX.
The enterprise agency was solely in a position to recuperate 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 traders in FTX, corresponding to Temasek, Sequoia Capital and Softbank.
As a result of lack of confidence, Multicoin stated it is just buying and selling on two different exchanges, Coinbase and Binance. For now, nonetheless, the corporate solely depends on Coinbase custody and self-managed chilly wallets, it stated.
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 certainly one 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 at present $13.53 passed off.
Regardless of the heavy losses, Multicoin formally nonetheless believes in Solana’s long-term potential, in response to its letter to traders. The enterprise agency stated it’s holding its place and nonetheless expects a vibrant future for Solana, as a result of the cryptocurrency has “one of the vital vibrant developer communities.”
Based mostly on our expertise in 2018 and 2020, we discovered that it’s not prudent to promote an asset throughout a short-lived disaster if the core thesis will not be impaired,” the letter states.
Nevertheless, there’s a juicy (unconfirmed) rumor circulating that Samani and Jain dealt with his private funds in a different way. Allegedly, the overall companions offered their private SOL stashes close to the highest.
Unconfirmed: LP states that Multicoin GPs offered their private SOL stashes close to the highest whereas refusing to promote for the fund and bull tweeting. They made lavish actual property and vehicle purchases and have did not return crucial $ to LPs for tax obligations.
Haters take be aware pic.twitter.com/uPONWcods3
— Evanss6.eth (@Evan_ss6) November 17, 2022
