Multicoin Capital’s Cryptocurrency Hedge Fund Achieves Remarkable 9,281% Increase Since 2017

Multicoin Capital, a hedge fund focused on cryptocurrency, has provided remarkable returns to its investors, surpassing 9,000% since its establishment in 2017.

In its annual letter to investors, the fund disclosed that after facing considerable losses in 2022 that nearly diminished its value, Multicoin Capital has experienced a significant recovery.

The investor letter, dated February 16, indicates that the Multicoin Capital Master Fund has achieved an astonishing return of 9,281% since its launch on October 1, 2017.

Multicoin Capital’s Gains Surge Amid Market Rebound

This performance is largely credited to the revival of the cryptocurrency market, with the fund realizing an impressive 537% return in 2023 alone.

The firm is expected to submit a Form ADV, which is a regulatory obligation for advisers registering with the Securities and Exchange Commission (SEC) and exempt reporting advisors.

As per the firm’s earlier Form ADV, it reported over $1.36 billion in assets under regulatory management.

Without deep drawdown? Multicoin Capital’s hedge fund lost 91.4% in 2022. You need a 1000% (10x) return to be break even, even if 9128% since inception still not recovered for people invested at end of 22

— B3nj4min.eth (@B3nj4min_ETH) March 30, 2024

Executives at Multicoin Capital, including Tushar Jain, Kyle Samani, and Matt Shapiro, also discussed the behavior of the crypto market in the investor letter.

They pointed out that in 2023, cryptocurrencies surpassed expectations and rebounded impressively, allowing the hedge fund to take advantage of the market’s overreaction and achieve notable outperformance.

The substantial returns generated by Multicoin Capital have more than offset the fund’s significant 91.4% loss in 2022.

The investor letter specifies that the performance metrics since the fund’s inception encompass various investments made through side pockets, which contributed to the overall results.

Despite experiencing a challenging bear market cycle, the executives at Multicoin Capital regard that period as ultimately insignificant for the investment firm.

They recognized the difficulties posed by macroeconomic tightening, a targeted political vendetta, and the repercussions from a major financial fraud, referencing the collapse of the troubled crypto exchange FTX, to which their firm was exposed.

Crypto Funds See a Surge in Assets

Earlier this year, Balance, a Canadian digital asset custodian, announced that it has once again reached $2 billion in assets under custody (AUC) amid the recent recovery in crypto markets.

Similarly, Korea Digital Asset (KODA), the largest institutional crypto custody service in South Korea, has experienced remarkable growth in crypto assets under its custody.

Recently, the company disclosed that the value of these crypto assets under its custody increased by nearly 248% in the second half of 2023.

KODA, formed through a partnership between major Korean bank KB Bank, crypto venture capital firm Hashed, and blockchain technology company Haechi Labs, reported that the value of these assets reached approximately 8 trillion Korean won ($6 billion) by the end of last year.

This marked a significant rise from the 2.3 trillion won recorded at the end of June 2023.

According to analysts at Bernstein Research, crypto funds could potentially reach an astonishing $500 billion to $650 billion within the next five years, a considerable increase from the current valuation of around $50 billion.

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