Ep. 741 Multicoin Capital Reveals What Could Start the Next Crypto Bull Market

Multicoin Capital launched its first liquid hedge fund in October 2017 and raised its first venture fund in July 2018 at 17 million dollars. The firm has grown from roughly 20 million dollars under management to a two-billion-dollar institutional asset manager and is currently investing from its third venture fund, which closed at 422 million dollars. Spencer Applebaum says Multicoin is staying exclusively focused on crypto rather than expanding into AI or robotics, arguing the firm has a genuine edge only in crypto.

Public writing has been the single factor Applebaum credits most with the firm's growth. Early institutional research in crypto was largely absent when Multicoin began publishing, and the writing has consistently attracted founders. A blog post written roughly five years ago identifying interest rate derivatives in DeFi as a major opportunity led directly to a funding deal approximately 18 months ago when a founder who had read it reached out. Some of Multicoin's best deals have come from founders who disagreed with a published thesis and wanted to argue the counterargument in person.

Multicoin runs a fundamentals-focused liquid hedge fund with average hold times ranging from several months to years, and a separate venture fund. The hedge fund does not engage in algorithmic trading, market making, or arbitrage. Disclosed holdings include Hyperliquid, Solana, Zcash, Camino, and Jito, and the fund has expanded its mandate to include crypto-related equities such as Robinhood and historically Coinbase. The top eight positions make up approximately 90 percent of the portfolio, and construction is bottoms-up rather than driven by sector allocation targets.

Approximately two-thirds of Multicoin's current venture fund is in projects where value is expected to accrue to the token, with one-third in equity and picks-and-shovels companies. Applebaum says the firm is leaning into tokens more than ever even as much of the broader crypto venture industry has soured on them. He argues that diverging cap tables between token holders and equity holders create unresolvable conflicts over revenue allocation. The Axelar acquisition by Coinbase, which left the token effectively defunct because only equity was acquired, and a large equity raise by Venice AI that left token holders feeling disadvantaged, are cited as concrete illustrations of this structural problem.

On the regulatory front, Applebaum says that if the Clarity Act passes it creates a real path for tokens to accrue more value and for onshore issuers to drive cash flows to token holders. Even if it does not pass, he argues the industry should use the next two years under a friendly administration to get SEC and CFTC rulemaking so embedded in financial workflows that it becomes difficult to undo. Former CFTC chairman Chris Giancarlo was cited as stating it does not matter whether Clarity passes because Mike Sellin and Paul Atkins already have crypto-friendly rulemaking loaded in the pipeline.

Traditional finance is moving meaningfully into crypto infrastructure. Morgan Stanley has released staking ETFs for both Ethereum and Solana targeting wealth management and institutional clients. Fidelity and Invesco now own the Morpho token, and Apollo's investment in Morpho was described by Applebaum as a deliberate signal to traditional financial markets that crypto is a serious long-term opportunity, distinguishing Apollo from firms that merely launch tokenized T-bill funds. Coinbase is routing crypto-backed lending flow to Morpho, allowing users to deposit bitcoin and borrow against it, and Robinhood has announced a similar integration. Applebaum notes that DeFi structurally carries a lower cost of capital than traditional finance because it draws from a global retail liquidity pool, citing a borrowing cost example of approximately 5 percent in DeFi versus around 7 percent at a specialty finance firm. Multicoin and the host both disclosed personal exposure to Morpho.

Applebaum identifies the GENIUS Act implementation, currently scheduled for January 2027, as a significant catalyst for stablecoin growth and the next bull market. The stablecoin market currently stands at approximately 300 billion dollars outstanding, and while the GENIUS Act passed roughly four months before the recording it cannot be used to launch stablecoins until that implementation date. He also predicts that public chains like Solana and Ethereum adding privacy features, KYC at the wallet layer, and permissioned transfers will make institutions comfortable bringing assets on chain. His primary thesis for the next crypto bull market is that exogenous real-world assets coming on chain and being actively traded will be the dominant driver, a shift he contrasts with the earlier posture of traditional banks that told Multicoin they would only extend credit against crypto holdings if the firm sold the assets first.