Multicoin Capital’s cryptocurrency-focused hedge fund has delivered returns of more than 9,000% to its first investors since 2017, according to the investment firm’s annual investor letter reviewed by The Block. The surge in returns marks a surprising reversal of fortunes for bear market funds, which lost nearly all their value in 2022.
The Multicoin Capital Master Fund has returned 9,281% of its value since launching on October 1, 2017, according to a letter sent to investors on February 16. The huge gains are largely a result of the resurgence of the cryptocurrency market, with the fund returning 537% in 2023. The company is expected to file Form ADV, which is required for advisors who must register with the Securities and Exchange Commission and exempt reporting advisors. Last year, they reported having more than $1.36 billion in assets under regulatory management, according to Form ADV.
“In 2023, cryptocurrencies are still fighting to the death as best they can,” Multicoin executives Tushar Jain, Kyle Samani and Matt Shapiro said in the letter. “The market rebounded in spectacular fashion and our hedge fund was able to capture the market’s overreaction and produce meaningful results.”
The strong returns more than offset Multicoin Capital’s 91.4% loss in 2022. (The fund said in its letter that its performance figures since inception include various investments made through side pockets..)
The bear market cycle was a particularly “painful” time for the investment firm, but ultimately an inconsequential time, according to executives.
“2022 has been a particularly painful cycle.“Because of the triple threat of macro austerity, political retaliation and the financial fraud of a lifetime.” Multicoin executives spoke in a note, alluding to the collapse of the beleaguered cryptocurrency exchange FTX that left their company exposed.
But these events ultimately did not signal the death of the company. “The combination of these events created a wave of panic selling that was probably worse than ever. “The actual incident itself,” he said.
Multicoin Capital is currently experiencing a financial recovery as the prices of some cryptocurrencies soar due to the boom in the digital asset market.
“Most institutional investors have exposure to cryptocurrencies through venture funds, but they are missing the biggest part.
The market is a liquid token,” the fund manager said. “We believe that cryptocurrency public markets can also produce similar tokens.
It’s better. Venture-scale returns are better than private markets, especially if you use a long-term strategy.
This fund is a good example of that. Since inception, the fund has returned 93.81 times on a net basis.
Almost all venture funds during the same period, including the first venture fund (launched in July).
2018)”
Bitcoin is trading at around $69,602 at the time of this writing, up more than 70% from the peak of the bear market. The Block’s pricing data. Meanwhile, the prices of several altcoins, such as solana and dogwifhat, have risen by more than 20,000% and 2,000%, respectively, since launch, according to data from The Block.
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