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Marc Andreessen and Ben Horowitz, founders of a16z.
PRIVATE KEY

Polychain lost $400 million investing in crypto and still beat the market

Member exclusive by Matthew De Silva

Polychain was one of the great success stories of the cryptocurrency boom. A hedge fund that once boasted more than $1 billion in assets under management, Polychain was founded in 2016 by Olaf Carlson-Wee, the colorful 29-year-old son of Lutheran pastors who works out of a secret location in a San Francisco warehouse. He sports a collection of vintage windbreakers and would spend weekday afternoons hiking without his phone, out of range of investors, according to a Wall Street Journal profile (paywall).

But what was endearingly quirky as cryptocurrency values soared may not seem as charming when they fall. Polychain lost nearly $400 million last year, and Ryan Zurrer, one of Polychain’s principals, was reportedly fired in December due to the performance. Neither Polychain nor Zurrer returned requests for comment.

Although Polychain’s 40% decline compares favorably to a 70% downturn in the wider crypto market, losing $400 million is still brutal. Considering that Carlson-Wee has reportedly liquidated $60 million in personal holdings and Polychain is being sued an investor who suspects underpayment, the situation seems precarious.

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