DigitalX (ASX:DCC) reports an update on its funds under management and value of bitcoin and digital asset holdings for the December 2022 period.
The company notes that its Bitcoin Fund saw a decline of 0.3% for the month and that its company Fund fell 3.7%, while the S&P Cryptocurrency Top 10 Equal Weight Index declined 14%. This decline makes up part of the total quarter decline, which saw DigitalX’s bitcoin fund and Fund fell 22.2%, while the Index declined by 26.5%.
In addition, the performance of both the DigitalX funds reflect the subdued market action in December in the wake of the collapse of the FTX exchange.
The company also notes that the DigitalX Fund strategy outperformed the index during December and the quarter due to its relatively conservative portfolio composition and higher allocations to bitcoin and ethereum than the index.
Addressing the bitcoin and digital asset exposure, DigitalX Chief Executive Officer (CEO) 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”
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 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 counterparty 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: real world asset tokenisation, decentralised data, digital identity opportunities; and 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 $800,000 of our Bitcoin holdings held in the Treasury 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.”
DigitalX is an ASX-listed technology and investment company that is focused on growing the blockchain economy through its digital asset funds management business, digital fintech and regtech products, and blockchain ventures. Through its asset management team, the company provides low-cost traditional asset management products for qualified investors that are looking to gain exposure to the growing alternative asset class of digital assets, including Bitcoin.