Multicoin's Aave Bet Craters Amid DeFi Sector Weakness

Multicoin Capital's aggressive bet on Aave (AAVE) has taken a hit, with the firm now facing over $40 million in unrealized losses. The position was built up through several tranches, including a large purchase in October and November of last year, when AAVE traded at around $218.

However, since then, AAVE's price has declined to around $97, leaving Multicoin's holding worth about $32.8 million, according to onchain data. This represents a significant loss for the firm, which had previously touted its conviction in Aave as one of the leading decentralized finance (DeFi) protocols.

The move has sparked concerns about potential selling pressure and the impact on AAVE's price. Onchain observers have flagged transfers suggesting Multicoin is cutting its position, with 150,000 AAVE moved to a Galaxy Digital OTC wallet and BitGo. The exact volume being sold remains unknown, leaving the market guessing whether this is a partial risk reduction or the start of a broader unwind.