Multicoin Capital loses 95% on its 8-figure investment in NFT project Loot

Quick Take

  • Multicoin Capital bought the top of the Loot NFT mania in September 2021.
  • The crypto fund is still holding the NFTs, even though they have declined in value by 95%.

Multicoin Capital has lost 95% on its 8-figure investment in NFT project Loot, according to co-founder Kyle Samani, who maintains this is all part of the process.

"Being willing to lose 100% of capital at risk is *very* important to our long term success," he tweeted, after acknowledging the drop in value. NFTs represent only a small part of Multicoin's crypto investments.

Vine founder Dom Hoffmann launched Loot in August 2021. Unlike other collections that display images or the so-called profile picture-style NFTs, Loot featured randomly generated texts. The idea was that the text would be used in yet-to-be-created games (so rare words might one day become rare items). The collection was free to mint.

Upon its launch, Loot quickly garnered popularity in the NFT space with over $230 million in sales in the first week. Communities quickly formed around the collection leading to the creation of derivative projects (mostly other text-based NFT collections).

The crypto investment fund bought 8 figures of Loot — at least $10 million — at the height of the collection’s popularity in September 2021. At the time, Samani stated it was Multicoin’s first NFT purchase. He said Loot’s investment thesis was simple; it was “the first investable crypto-native game.”

This popularity did not, however, last long as trading activity on the collection soon plummeted. Data from NFT marketplace OpenSea shows that Loot’s floor price on September 5 last year was about 9 ETH ($35,000 at the time). The floor price of Loot is now 1.1 ETH which amounts to $3,100 at current prices.

Today, Loot ranks outside the top 50 NFTs on OpenSea with a floor market capitalization of 8,557 ETH ($24 million) — that's calculated if you multiple the price of the cheapest Loot NFT by the number of NFTs in the collection.

Samani says Multicoin is still holding its Loot NFTs despite the 95% decline in the value of its investment in the NFT collection.

In March, Samani told The Block that buying NFTs directly is not viable enough for Multicoin Capital to invest in at scale. He said it was unlikely that the firm would have even a 1% position in NFTs. Instead, he said the company will focus on the infrastructure layers supporting NFTs.

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