By Gaurav S. Iyer, IFC Published : March 12, 2018
Ethereum News Update
It’s rare for new blockchain companies to influence my Ethereum price forecast, but there are exceptions to the rule. Multicoin Capital Management, LLC. is a good example.
Multicoin is an investment firm that will soon traverse the blockchain space, hunting for the next generation of tokens.
What sets it apart from the usual riffraff is that it plays with real money—the target is $250.0 million—and features a star-studded cast of investors, including Marc Andreessen.
If you don’t know Andreessen, I guarantee you know some of the companies he’s brought mainstream. BuzzFeed, Airbnb, Facebook Inc (NASDAQ:FB), Groupon Inc (NASDAQ:GRPN), Skype, Lyft, Pinterest, Slack—they all received investment from Andreessen’s venture capital firm before going big.
This long record of high-profile successes has made his firm, Andreessen Horowitz, a bellwether of Silicon Valley sentiment. He is the smart money. And where the smart money goes, the dumb money will follow.
Multicoin already has $50.0 million committed to its fund. The remaining $200.0 million should be easy to raise now that Andreessen (and his opinion-maker status) is on board. The funding round will close at the end of June.
However, retail investors won’t have access to this investment fund.
What we can try to do instead is anticipate where the fund will put its money, or else identify which cryptocurrencies will benefit from the fund’s involvement in cryptocurrency markets. My guess is that Ethereum (ETH) will emerge as the big winner.
For one thing, Ethereum is the launchpad for most new cryptocurrencies.
This makes it, according to “fat protocol theory,” the beneficiary of most crypto gains. But more than that, Multicoin’s investment dollars have to travel through Bitcoin or Ethereum in order to reach their intended target, which should help keep ETH demand consistently high.
So even if Andreessen and his cronies spend more time investing in altcoins than foundational cryptocurrencies like Ethereum, the net result could be positive for ETH.
I firmly believe that ETH prices are undervalued at the moment. For them to be trading anywhere below $1,000 reflects undue pessimism in the market.
This pessimism could abate in the second quarter, speeding the way toward our $1,500 Ethereum price forecast, but don’t be lulled into a false sense of security. An unforeseen obstacle can still derail the best laid plans of mice and men.