One of the largest crypto investment firms, Multicoin Capital, told investors in a letter on Thursday that FTX’s collapse and the resulting market decline has caused the fund to be down by 55% this month. Multicoin added that it expects the market to get worse before a rebound begins.
“We expect to see contagion fallout from FTX/Alameda over the next few weeks,” the letter said. “Many trading firms will be wiped out and shut down, which will put pressure on liquidity and volume throughout the crypto ecosystem. We have seen several announcements already on this front, but expect to see more.”
Multicoin Capital currently has assets stranded on FTX whilst the bankruptcy proceedings are going on. In a letter sent out last week, the firm said it was able to retrieve roughly 25% of its assets that were held on FTX; however, the inaccessible money that is still on FTX represents around 15.6% of the fund’s total assets.
Multicoin has since stated that 100% of its assets “outside of the capital stuck on FTX” is on Coinbase or in self-custody wallets. “At present, the fund has no assets exposed to any other counterparties,” Multicoin said. “In the future, we anticipate some diversification of custodial exposure – with Coinbase expected to remain our primary custodian – and will resume trading with other counterparties as we continue to assess the present market fallout.”
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- Source: https://www.cryptocompare.com/email-updates/daily/2022/nov/18/
