Key Takeaways
- • Multicoin Capital accumulated 338,005 AAVE tokens between October and November 2025 at an average price of $218 per token via Galaxy Digital's OTC desk, representing a $73.7 million initial investment.
- • The firm is now underwater by over $40 million (approximately 55% loss) as AAVE trades near $97, down sharply from the $218 entry price.
- • On-chain monitoring indicates Multicoin has begun liquidating its AAVE position, transferring 150,000 tokens ($14.9 million at current prices) to custodial wallets and exchange liquidity pools through Galaxy Digital and BitGo.
- • AAVE's underperformance reflects broader weakness in DeFi blue chips during 2026, which have failed to keep pace with bitcoin's rally above $100,000, signaling potential sector rotation concerns.
Summary
Multicoin Capital, the Austin-based crypto hedge fund and venture investor known for concentrated, high-conviction positions, is facing significant losses on a major Aave (AAVE) accumulation built through Galaxy Digital's over-the-counter desk. Between mid-October and late November 2025, Multicoin acquired 338,005 AAVE tokens in multiple tranches, including a 210,000-token block purchased after the October 11 market sell-off and an additional 61,637 tokens on November 25. The total acquisition price averaged approximately $218 per token, representing an approximate $73.7 million capital deployment.
At the time of accumulation, the position appeared strategically sound—a well-capitalized institutional investor building exposure to a DeFi protocol blue chip at perceived depressed valuations. However, AAVE has since declined substantially, currently trading near $97 per token. At these prices, Multicoin's 338,005-token position is worth approximately $32.8 million, translating to an unrealized loss exceeding $40 million, or roughly 55% of the original outlay.
On-chain data tracked by monitoring platforms indicates that Multicoin has begun exiting the position. The firm transferred 150,000 AAVE tokens—valued at approximately $14.9 million at current market prices—to custodial wallets and major exchange liquidity pools via both Galaxy Digital and BitGo. The exact total volume being offloaded remains uncertain, but the flow suggests active loss-cutting rather than passive position management.
The AAVE weakness underscores a broader underperformance dynamic within the DeFi sector during the 2026 bull cycle. While bitcoin has reclaimed levels above $100,000, many DeFi tokens and protocols have failed to participate proportionately, suggesting potential sector rotation or diminished investor appetite for DeFi exposure relative to macro risk assets. Multicoin's forced liquidation may add incremental selling pressure to AAVE liquidity pools, potentially extending downside for the token in the near term.
At the time of accumulation, the position appeared strategically sound—a well-capitalized institutional investor building exposure to a DeFi protocol blue chip at perceived depressed valuations. However, AAVE has since declined substantially, currently trading near $97 per token. At these prices, Multicoin's 338,005-token position is worth approximately $32.8 million, translating to an unrealized loss exceeding $40 million, or roughly 55% of the original outlay.
On-chain data tracked by monitoring platforms indicates that Multicoin has begun exiting the position. The firm transferred 150,000 AAVE tokens—valued at approximately $14.9 million at current market prices—to custodial wallets and major exchange liquidity pools via both Galaxy Digital and BitGo. The exact total volume being offloaded remains uncertain, but the flow suggests active loss-cutting rather than passive position management.
The AAVE weakness underscores a broader underperformance dynamic within the DeFi sector during the 2026 bull cycle. While bitcoin has reclaimed levels above $100,000, many DeFi tokens and protocols have failed to participate proportionately, suggesting potential sector rotation or diminished investor appetite for DeFi exposure relative to macro risk assets. Multicoin's forced liquidation may add incremental selling pressure to AAVE liquidity pools, potentially extending downside for the token in the near term.
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