TL;DR:
- Multicoin received 338,005 AAVE from a Galaxy Digital OTC wallet at about $218 average, for an estimated $73.7 million outlay.
- With AAVE near $97, the position is worth about $32.8 million, leaving more than $40 million in unrealized losses.
- Onchain observers flagged 150,000 AAVE moved to Galaxy Digital OTC and BitGo, raising questions about selling pressure, exit routes and DeFi blue-chip weakness during the current cycle for holders.
Multicoin Capital’s large AAVE position has become a public stress point after onchain data showed the firm sitting on more than $40 million in unrealized losses and appearing to reduce exposure. Between Oct. 13 and Nov. 25, 2025, Multicoin received 338,005 AAVE from a Galaxy Digital OTC wallet at an average price near $218, implying an outlay of roughly $73.7 million. With AAVE trading near $97, the position is worth about $32.8 million. For traders, the disclosure turns a high-conviction DeFi bet into a live liquidity event, where exit strategy matters almost as much as entry price.
DeFi Conviction Meets Market Reality
The original build looked like an institutional dip-buy. Multicoin accumulated across several tranches, including 210,000 AAVE after the Oct. 11 market sell-off and another 61,637 AAVE on Nov. 25 for about $10.94 million. At the time, the positioning fit a broader decentralized finance thesis around AAVE, one of the sector’s most recognized lending protocols. But conviction trades become harder to defend when drawdowns persist, especially in altcoin markets where deep OTC entry does not guarantee an equally painless exit.
Onchain observers have now flagged transfers suggesting Multicoin is cutting the position, with 150,000 AAVE moved to a Galaxy Digital OTC wallet and BitGo. The exact volume being sold remains unknown, which leaves the market guessing whether this is a partial risk reduction, preparation for another OTC arrangement or the start of a broader unwind. The uncertainty itself can become pressure, because AAVE buyers must price not only fundamentals, but also potential overhang from a large holder managing losses.
The episode lands against a difficult backdrop for DeFi blue chips. Bitcoin has reclaimed levels above $100,000 in 2026, but many DeFi tokens have lagged the broader cycle, and AAVE’s slide illustrates that divergence. OTC desks help institutions build size without moving spot markets, yet they do not insulate portfolios from prolonged underperformance once prices trend lower. If Multicoin continues exiting, additional supply could weigh on AAVE in the near term, particularly through open-market selling. The lesson is that liquidity can disappear after accumulation, leaving even sophisticated funds exposed when a sector narrative fails to translate into price leadership. For allocators, the case also reinforces how transparent ledgers can turn portfolio management into a public market signal before any disclosure.
