Investor Letter Shocker: Multicoin Capital's Hedge Fund Reports 91.4% Loss in 2022 – Here's What Happened
Digital asset investment firm Multicoin Capital lost as much as 91.4% in 2022 as investors rushed for the exits following the catastrophic collapse of FTX.
According to a copy of the firm’s annual investor letter, the hedge fund was hit hardest after the collapse of FTX despite managing to weather the collapse of Terra's algorithmic stablecoin and the failure of another crypto hedge fund Three Arrows Capital (3AC). The letter read:
“While the fund successfully dodged the catastrophic implosions of LUNA and Three Arrows Capital earlier in the year, we didn’t avoid the explosive revelations about FTX nor the subsequent contagion that spread across the market. After a remarkable year in 2021, our performance in 2022 was the worst since inception.”
Multicoin Capital is one of the largest and oldest investment management firms in the crypto company, and it is widely regarded as a very astute encryption investment management firm.
The fund describes itself as "a thesis-driven investment firm that invests in cryptocurrencies, tokens, and blockchain companies reshaping trillion-dollar markets."
Headed by managing partner Kyle Samani, Multicoin Capital launched its hedge fund strategy in October 2017, which invests in liquid tokens. The firm also operates three venture capital funds and has invested in the now-bankrupt exchange FTX.
It is worth noting that Multicoin’s crypto hedge fund remains up over 1,300% net of fees from its inception through 2022 despite the massive drawdown.
Meanwhile, as the broader crypto market rebounded earlier this year, Multicoin reported that the fund gained 100.9% in January 2023, bringing the fund’s inception-to-January return to 2,866%.
Multicoin’s losses last year largely come from its indirect
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