Multicoin Capital Founder Abandons Web3 Vision, Citing Limited Blockchain Utility

VADODARA, February 5, 2026 — Multicoin Capital co-founder Kyle Samani has publicly renounced his belief in the Web3 vision, describing blockchain technology as fundamentally limited to financial ledger applications. This latest crypto news emerges from a now-deleted social media post where Samani declared crypto "not as fundamentally interesting" as previously hoped, shortly before announcing his resignation from the venture firm.

Investigation: The Web3 Ideology Collapse

According to the source report from Coinness, Kyle Samani posted on platform X that blockchain would primarily reshape finance but hold few roles beyond that ledger function. He specifically noted DePIN (Decentralized Physical Infrastructure Networks) as noteworthy while asserting that "the answers to all interesting questions, with the exception of on-chain confidentiality, have already been found." The post was deleted shortly after publication, but not before capturing institutional attention.

Market structure suggests this commentary represents a significant ideological shift from a previously bullish venture capitalist. Samani's firm, Multicoin Capital, has been a major investor in Web3 infrastructure projects, making his public skepticism particularly damaging to narrative-driven valuations. Consequently, the timing coincides with Bitcoin trading at $72,437, down 5.43% in 24 hours amid extreme market fear.

Market Context & Historical Precedent

Historically, high-profile bearish turns from institutional figures have preceded prolonged consolidation phases. The 2018 cycle saw similar declarations from early Bitcoin adopters before the market entered a two-year accumulation phase. In contrast, the current environment features more sophisticated derivatives markets that amplify sentiment shifts through gamma squeezes and liquidation cascades.

Underlying this trend is a broader reassessment of blockchain's utility beyond financial settlement. According to Ethereum's official documentation on use cases, most successful applications remain in decentralized finance (DeFi) and tokenization, aligning with Samani's "ledger" characterization. This reality check contrasts sharply with the 2021-2023 hype cycle that predicted blockchain disruption across social media, gaming, and supply chains.

Related Developments:

• Vitalik Buterin's recent ETH sale suggests founder-level portfolio rebalancing amid volatility.
• Trend Research's substantial ETH liquidation indicates institutional distress at current price levels.

Technical Architecture & Price Action

On-chain data indicates weakening holder conviction at current price levels. The Bitcoin UTXO (Unspent Transaction Output) age bands show increased movement from 3-6 month holders, typically signaling distribution phases. , the 200-day moving average at $68,500 represents critical Fibonacci 0.618 support from the 2024-2025 rally.

Market analysts observe a developing Fair Value Gap (FVG) between $74,000 and $76,000 that requires filling for bullish structure restoration. The current price action suggests liquidity grabs below $72,000 to trigger stop-loss orders before potential reversal attempts. Volume profile analysis reveals thin trading at these levels, increasing susceptibility to volatile moves.

By The Numbers

Why It Matters

Samani's commentary matters because it challenges the fundamental investment thesis for hundreds of Web3 projects. Venture capital flows into blockchain startups have historically relied on expansive utility narratives beyond finance. If institutional leaders now view blockchain as primarily a settlement layer, valuation models for social, gaming, and infrastructure protocols require drastic recalibration.

Market structure suggests this sentiment shift could accelerate the ongoing rotation from narrative-driven altcoins to Bitcoin and Ethereum's core value propositions. The extreme fear reading of 12/100 on the Crypto Fear & Greed Index reflects this psychological breaking point. Consequently, projects lacking clear revenue models or sustainable tokenomics face increased scrutiny and potential liquidity crises.

Expert Commentary

"High-profile ideological reversals often mark local sentiment extremes. While Samani's technical assessment about blockchain's primary utility as a ledger has merit, his timing coincides with maximum fear readings that historically precede regime changes. The market now faces a critical test of whether Web3's expansive vision can survive this institutional credibility crisis."— CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Market structure suggests two primary technical scenarios based on current order flow and on-chain positioning.

• Bullish Invalidation Level: $76,500. A sustained break above this resistance would fill the current Fair Value Gap and invalidate the bearish structure, potentially triggering short covering toward $80,000.
• Bearish Invalidation Level: $68,500. A weekly close below the 200-day moving average would confirm distribution continuation, targeting the next major support cluster at $65,000-$66,000.

The 12-month institutional outlook now incorporates increased skepticism about blockchain's non-financial applications. This could benefit Bitcoin and Ethereum's store-of-value narratives while pressuring altcoins dependent on Web3 adoption stories. Historical cycles suggest such narrative resets typically last 6-12 months before new use cases emerge.