Core Viewpoint - The altcoin market is currently struggling, but there is potential for recovery driven by Federal Reserve monetary policy changes, particularly through the Reserve Management Purchases program, which could lead to increased demand for Bitcoin and altcoins [1][3][7]. Group 1: Market Conditions - The altcoin market has faced significant challenges, with a notable liquidation event on October 10 that resulted in the loss of over $19 billion [4]. - Retail traders have largely exited the market, contributing to the decline in altcoin performance, as they previously rotated profits from Bitcoin into altcoins [5]. - Hedge fund investors have been withdrawing capital due to poor returns in October, exacerbating the selling pressure on altcoins [3][4]. Group 2: Federal Reserve Influence - The Federal Reserve's new Reserve Management Purchases program is expected to inject $40 billion a month into the economy, which could mimic quantitative easing and potentially drive Bitcoin prices to $200,000 by March [1][7]. - This increase in money supply is anticipated to create demand for leverage and synthetic dollars, which could aid in the recovery of the altcoin market [3][7]. Group 3: Investment Strategy - Investors are encouraged to take advantage of the current market conditions by selectively investing in undervalued altcoins, as the market is expected to heal over time [2][3]. - The focus should be on understanding how exchanges operate and managing capital wisely during this recovery phase [2].

Investment Thesis - Multicoin Capital's liquid fund invests in ENA, the native token for Ethena Protocol, a leading synthetic dollar issuer [1] - Ethena is positioned at the intersection of stablecoins, perpification, and tokenization, representing powerful trends in modern finance [2][13] - Ethena generates yield by monetizing the market's demand for leverage via basis trade [1] Ethena's Unique Position - Ethena is the only synthetic dollar with significant distribution and liquidity outside of USDC and USDT [2] - USDe is integrated as a core form of collateral on major centralized exchanges like Binance and Bybit [3] - Ethena exhibits a mild negative correlation with Fed Funds rates; as rates fall, demand for crypto leverage increases [4] Financial Performance - The protocol has generated close to $600 million in revenue, with over $450 million produced in the past twelve months [4] Tokenization and Market Opportunity - Crypto is democratizing access to basis trades through tokenization, traditionally reserved for accredited investors [9] - Ethena is initially tokenizing the basis trade but can diversify its yield sources over time [11] - The global equity market is approximately $100 trillion, about 25 times larger than the crypto market, indicating a substantial opportunity for perpification [5] Risk Management and Team - Ethena's team has demonstrated strong execution and risk management, surviving significant market events without losses [12] - There is a clear path to fee switch activation, which is expected to be viewed favorably by the market [13]