DECEMBER BITCOIN AND DIGITAL ASSET EXPOSURE
DigitalX Limited (ASX:DCC, OTCQB: DGGXF) (the Company) provides the following monthly update to shareholders on its funds under management and value of Bitcoin and digital asset holdings as at the end of December 2022.
The DigitalX Bitcoin Fund declined 0.3% for the month and the DigitalX Fund fell 3.7%, while the S&P Cryptocurrency Top 10 Equal Weight Index (“Index”) declined 14.0%. Over the quarter, the DigitalX Bitcoin Fund declined 18.8% and the DigitalX Fund fell 22.2%, while the Index declined 26.5%.
The performance of both DigitalX funds reflected the subdued market action in December in the wake of the collapse of the FTX exchange. The active DigitalX Fund strategy outperformed the Index this month and quarter due to our relatively conservative portfolio composition and higher allocations to Bitcoin and Ethereum than the Index.
DigitalX Chief Executive Officer, Lisa Wade said:
“Although a negative month and tough quarter for digital assets, it is pleasing that our funds outperformed the Index with our focus on quality names inside the Top 20 crypto universe.
We believe 2023 will see further volatility across financial markets and expect the recent correlation to digital asset markets to continue. In saying this, we believe that the underperformance gap of digital asset markets to broader equity markets will close over the medium term (this gap is currently 55%) as we see further movement towards industry regulation and transition from traditional finance to decentralised finance. In the short term, digital asset markets must navigate the continued fallout from the collapse of FTX, with the possibility of further Chapter 11 bankruptcies dominating news flow in January.
We continue to position ourselves as a safe pair of hands in digital asset management by managing counter-party risk, utilising cold storage methods and producing our significant proprietary research aligned to our long term thematic views for the digital assets sector. Our top investment themes continue to include:
1. Real world asset tokenisation;
2. Decentralised data (including ZK Rollups – a cryptographic proof to validate Ethereum transactions faster, cheaper and more securely);
3. Digital identity opportunities; and
4. Web3.0 infrastructure across decentralised application networks.
We believe the structural shift of financial infrastructure into Web3.0 financial guardrails is well underway and expect institutional adoption to continue to accelerate in 2023.
Finally, in December ~A$800,000 of our Bitcoin holdings held in Treasury (~15%) was converted into cash as part of our broader strategic initiative to more actively manage treasury assets and optimise investment opportunities. The board and management are focused on proactively generating shareholder value and making sure our balance sheet is generating value.”
For information on the DigitalX digital asset funds please visit https://digitalx.fund/
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.