At Messari’s recent Mainnet conference, Tushar Jain, managing partner at Multicoin Capital, addressed the ongoing struggles within the crypto venture capital sector.
At Messari’s recent Mainnet conference, Tushar Jain, managing partner at Multicoin Capital, addressed the ongoing struggles within the crypto venture capital sector following the downturn that began post-pandemic.
Jain highlighted that the market is still grappling with the overinflated valuations and stagnant token prices that characterized the previous bull run, stating, “I would say the market still has a bit of a hangover to work through.”
According to a report on 2021’s crypto venture capital space, investors injected $33 billion into crypto startups, accounting for 5% of the global venture funding across all sectors. Many firms, such as NFT platform OpenSea and lending company BlockFi, achieved unicorn status during this period, but Jain suggested that these valuations may have been overstated.
He noted the lack of down rounds—occurrences where firms raise funds at a lower valuation—indicating an unwillingness among investors to accept current market realities.
Jain pointed out that the stagnation of major token launches and the decline in their values has compounded the uncertainty within the sector. He remarked, “There’s so much hype, so much excitement,” yet many of the promises made by crypto have yet to be realized.
Despite the ongoing challenges, Jain expressed a level of confidence in the foundational principles of the industry, acknowledging the cyclical nature of crypto markets. “This is the most cyclical industry possibly in the history of capitalism,” he stated, emphasizing that emotional responses often follow price movements.
Multicoin Capital, which raised $430 million for its Venture Fund III in 2022, is currently deploying those funds and is not actively seeking to raise more.
Jain admitted that the firm has made mistakes in its investments, a reality he suggests is inherent to taking risks in venture capital.
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