Managing Partner of Multicoin Capital: The market is still in a 'hangover' state from the previous bull market

Tushar Jain, Managing Partner of Multicoin Capital, recently had a discussion with Leo Schwartz, a reporter from Fortune magazine, at the Mainnet conference hosted by Messari. He stated that the cryptocurrency venture capital industry has not fully realized the real impact of the last market downturn.

According to The Block, Tushar Jain said on stage:

I think there is still a bit of a 'hangover' in the market that needs to be digested. This is true across the entire venture capital industry - not just in the cryptocurrency sector - as there was a large influx of funds into the venture capital asset class in 2021 and 2022, and many people have not yet faced reality and accepted the situation

A report at the time indicated that investors invested $33 billion in cryptocurrency startups in 2021, accounting for 5% of all global venture capital investments. During the peak of the bull market during the pandemic, many cryptocurrency companies such as NFT platform OpenSea and bankrupt lending company BlockFi became "unicorns" with valuations exceeding billions of dollars. However, Tushar Jain pointed out that the "book value" of these companies is overvalued due to excessive capital investment.

However, Tushar Jain stated that despite changes in the market environment, many companies' valuations have not significantly decreased or adjusted, but remain at their previous high levels. This may suggest that the market has not yet fully adjusted the valuations of these companies. In addition, this "hangover" phenomenon seems to be not limited to the venture capital field. Tushar Jain believes that many promises of the cryptocurrency industry have not yet been realized:

There is a lot of hype and excitement. At the same time, we have seen prices stagnate, with many major tokens experiencing a significant decline in their issuance value over the past year. In addition, there is uncertainty about the current political situation

However, this expert who has been investing in cryptocurrency for a long time has not completely lost confidence.

I still firmly believe in the core principles that support this industry, and we have experienced these cycles before. This may be the most cyclical industry in the history of capitalism, and many times people's emotions fluctuate with changes in prices

In 2022, Multicoin completed a $430 million fundraising for Venture Fund III, and Tushar Jain stated that the company is still investing. He pointed out that the company is currently not actively seeking additional funding, but also admitted to making incorrect investments.

We have made many mistakes and will make them again in the future. In fact, I have a viewpoint: if there are no investments in your venture capital fund that have been reset to zero, it means you have not taken enough risk