Strategies For Investing In Multicoin Capital

Multicoin Capital is a thesis-driven cryptofund that combines venture capital economics with public market liquidity. The firm, which was founded in 2017 and is based in Austin, Texas, seeks to invest in early-stage, later-stage, and seed-stage companies operating in the software, cryptocurrency, tokens, and blockchain sectors. Multicoin Capital has a long-term investment strategy, focusing on tokens that reshape entire sectors of the global economy. The firm has raised significant funding for its crypto-focused venture funds, with its latest initiative aiming to raise $250 million for its third crypto fund. Multicoin Capital's investments include a diverse range of companies, such as Mountain Protocol, Arch, Wormhole, and io.net, showcasing its commitment to accelerating the transition to decentralized institutions.

Multicoin Capital's thesis-driven investment strategy

Multicoin Capital is a thesis-driven cryptofund that makes long-term, high-conviction investments in crypto companies and protocols across public and private markets. The firm was founded in 2017 and is based in Austin, Texas. Multicoin Capital's mission is to accelerate the transition from centralized institutions of the industrial age to decentralized institutions of the internet age.

The firm's investment strategy is centred around three key theses:

• Open Finance: Making units of value (such as stocks, bonds, real estate, and currencies) interoperable, programmable, and composable on open, distributed ledgers. This will make capital markets more accessible and efficient, paving the way for new services and applications that deliver tremendous value.
• Web3: Empowering consumers to control their data, rather than tech giants, credit bureaus, and advertisers. This shift will cause incumbents to lose their primary competitive advantage, creating massive opportunities for innovation and value creation.
• Global, State-Free Money: Framing natively digital money as a superset of "digital gold", offering greater breadth and use cases, and representing a much larger addressable market.

Multicoin Capital's thesis-driven approach involves investing in crypto companies and protocols that align with these three overarching theses. The firm seeks to identify category-defining crypto companies that will drive transformative change across sectors of the global economy.

By focusing on these long-term investment theses, Multicoin Capital aims to capitalise on the shift from permissioned to permissionless financial systems, accelerating humanity's ability to achieve its full potential.

Long-term investments in tokens reshaping global sectors

Multicoin Capital is a thesis-driven cryptofund that makes long-term, high-conviction investments in tokens that reshape entire sectors of the global economy. The company is based in Austin, Texas, and was established in 2017.

Multicoin Capital has a mission to accelerate the transition from the centralized institutions of the industrial age to the decentralized institutions of the internet age. It aims to do this by accelerating the transition from permissioned to permissionless financial systems, thus accelerating humanity’s ability to achieve its full potential.

The company has a history of investing in crypto companies and protocols across public and private markets. For example, in 2024, Multicoin Capital announced its investment in Arch, a Bitcoin-native application platform that unlocks decentralized finance (DeFi) on the world's most valuable blockchain. It also co-led a $225M round in Wormhole, a leading solution in the market with a full-stack interoperability platform.

In terms of long-term investments in tokens reshaping global sectors, here are some examples of companies and tokens that have the potential to reshape sectors:

• Ethereum (ETH): Ethereum is an open-sourced network that leverages smart contracts to allow developers to list various dApps (decentralized applications), NFTs, and other protocols. It has a large developer community and continuously innovates and updates its platform, ensuring long-term growth and relevance. Ethereum has a strong track record, having reached an all-time high of $4,900 in November 2021.
• Polygon: Polygon is an open-source, permissionless platform deployed on Ethereum to act as a scalability solution. It supports cross-chain communication and enables seamless integration with other blockchains, which expands its ecosystem and use cases. Its architecture also ensures low transaction fees, making it attractive to decentralized applications and users.
• Bitcoin (BTC): Bitcoin was the first cryptocurrency and is still the most widely accepted and integrated into financial systems. It has a capped supply of 21 million coins and is often seen as "digital gold". Its scarcity increases its value over time, and its role as a hedge against inflation attracts long-term investors.
• Solana (SOL): Solana is an open-sourced blockchain that provides decentralized finance (DeFi) solutions by leveraging smart contracts. It offers higher scalability than Ethereum through its proof-of-history (PoH) consensus combined with a proof-of-stake (PoS) consensus. It can handle up to 50,000 transactions per second (TPS) at an average cost of just $0.00025 per transaction.
• XRP: XRP is the native crypto on the XRP ledger blockchain, which is used by hundreds of banks and financial institutions as a cross-border payment settlement system. XRP transactions are fast, secure, and affordable, making it ideal for real-time cross-border payments and micro-transactions. Its adoption in mainstream finance supports long-term demand and trust.

These examples demonstrate the potential for long-term investments in tokens that can reshape global sectors. By investing in innovative blockchain technologies and cryptocurrencies, Multicoin Capital and other investors can capitalize on the opportunities presented by decentralized finance and the transition to a more permissionless financial system.

Crypto companies and protocols in public and private markets

Multicoin Capital is a thesis-driven crypto fund that invests in crypto companies and protocols across public and private markets. The company makes long-term, high-conviction investments in category-defining crypto companies and protocols.

In the public markets, Multicoin Capital has invested in companies such as Mountain Protocol, Arch, Wormhole, io.net, Pyth Network, and Filecoin. These companies are working on a range of applications, including stablecoins, Bitcoin programmability, decentralised finance (DeFi), interoperability, and distributed compute marketplaces.

In the private markets, Multicoin Capital has participated in funding rounds for companies like Superfluid Finance, Glif, and TradingView. These companies are focused on various aspects of the crypto ecosystem, including decentralised finance, blockchain technology, and crypto trading.

Overall, Multicoin Capital's investments cover a diverse range of areas within the crypto space, reflecting their interest in companies and protocols that are reshaping sectors of the global economy.

Venture capital economics with public market liquidity

Multicoin Capital is a thesis-driven cryptofund that invests in tokens that reshape entire sectors of the global economy. It aims to accelerate the transition from the centralised institutions of the industrial age to the decentralised institutions of the internet age. Based in Austin, Texas, the firm was established in 2017 and has since raised hundreds of millions of dollars for its crypto funds.

Multicoin Capital's investment strategy combines venture capital economics with public market liquidity. Traditional venture capital firms invest in the equity of young, fast-growing technology startups, with each individual investment carrying a high degree of risk. The venture capital economics strategy involves making a number of investments, with the expectation that a few big wins will cover the losses from unsuccessful investments. These investments are typically illiquid, meaning that once an investment is made, the fund cannot change its mind or reduce its investment. This also means that limited partners who commit capital to venture funds have to make long-term commitments of 7-13 years.

Multicoin Capital, on the other hand, benefits from the liquidity provided by cryptoassets. While the firm still experiences venture capital economics by investing in promising protocols while they are young, most of the assets it invests in are liquid. This liquidity allows Multicoin Capital to change its mind about an investment if new information comes to light. For example, if an investment is not performing as well as expected, the firm can cut its losses and sell, rather than labouring through a lengthy salvage process.

Additionally, liquidity enables Multicoin Capital to invest in competing protocols, lowering the risk for investors. Instead of having to pick a single winner in a competitive space, the firm can invest in multiple companies within a single industry or market. This strategy is particularly relevant in the crypto space, where it can be easier to spot emerging trends than to pick specific winners. For example, rather than investing solely in the market leader, Ethereum, Multicoin Capital can also invest in smaller smart contract platforms with strong growth potential.

By combining venture capital economics with public market liquidity, Multicoin Capital offers investors the potential for venture-style upside with lower risk and shorter commitment periods.

Multicoin Capital's investment partners

Multicoin Capital is a thesis-driven cryptofund that combines venture capital economics with public market liquidity. Based in Austin, Texas, the firm was founded in 2017 and invests in early-stage, later-stage, and seed-stage companies in the software, cryptocurrency, tokens, and blockchain sectors. Multicoin Capital's mission is to accelerate the transition from centralized institutions of the industrial age to decentralized institutions of the internet age.

Multicoin Capital has 5 strategic partners and customers. The firm recently partnered with Bitwise Asset Management in June 2022. Multicoin Capital has also co-led funding rounds with other venture capital firms, including Ascensive Assets, Alameda Research, and Animoca Brands.

The firm's investment partners include its founder and managing partner, Kyle Samani, and managing partner Tushar Jain, who have both publicly commented on the firm's investment strategy and outlook. Multicoin Capital's investment partners seek to invest in crypto companies that others might miss, with a focus on blockchain technology as a driver of social good.

Multicoin Capital's investment strategy is centred around long-term, high-conviction investments in category-defining crypto companies and protocols across public and private markets. The firm has a particular interest in stablecoins and decentralised finance (DeFi), as well as the intersection of crypto and attention theory.

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