Multicoin Capital Managing Partner Tushar Jain Discusses Crypto Market

Tushar Jain, Managing Partner at Multicoin Capital, shared insights on the crypto venture capital sector during a fireside chat at Messari’s Mainnet conference with Fortune’s Leo Schwartz.

Market Hangover

Jain noted that the market is still experiencing a ‘hangover’ from the last downturn, impacting all of venture capital, not just crypto. “There was a lot of money pumped into the venture asset class in 2021 and 2022, and many individuals are hesitant to face the repercussions,” he explained.

Investment Trends

In 2021, investors invested $33 billion into crypto startups, comprising 5% of global venture funding. Several crypto firms, such as NFT platform OpenSea, reached unicorn status during the pandemic-era bull run, but Jain suggested that many of these valuations were overly inflated.

Jain remarked, “We are not seeing that many down rounds,” referring to instances when private firms raise funds at lower valuations.

Promises Unfulfilled

Jain also highlighted that the excitement surrounding crypto has not translated to price stability. Many token launches have struggled, and uncertainties in political situations add to the instability.

Cycles of Optimism

Despite the challenges, Jain remains hopeful about the industry’s future, stating, “I still fundamentally believe in the core principles that underlie the industry, and we’ve been through these cycles before.” He acknowledged that the crypto industry is highly cyclical, often driven by emotions linked to price movements.

In 2022, Multicoin raised $430 million for Venture Fund III, which Jain confirmed is still being deployed. The firm is not currently seeking additional funds, and Jain admitted they have made poor investment choices in the past: “If your venture fund doesn’t have any zeros in it, then you’re not taking enough risk.”