DigitalX’s Crypto assets fell 75% in 2022 and more exchanges may fail in 2023

Nick Sundich, January 10, 2023

DigitalX (ASX:DCC), the company that runs a digital asset funds management business and develops blockchain-powered products, provided its monthly update this morning. In the last 12 months, the company’s Bitcoin and digital asset holdings fell from $43.6m to $10.9m (a 75% decline), whilst Total Funds Under Management fell from $33,6m to $11.9m (a 65% decline). But it still tried to claim a moral victory.

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DigitalX at least outperformed its peers

DigitalX did not shy away from the fact that it had been a difficult year for crypto markets. But it somehow managed to outperform the selected benchmark Index – the S&P Cryptocurrency Top 10 Equal Weight Index.

During the past 12 months, the latter index fell 27%, while the Digital Bitcoin Fund only fell 18.8% and the DigitalX Fund fell 22.2%. This difference may seem trivial to most investors, particularly those invested in the funds, because any double-digit decline hurts. However, the past month has been rosier. The S&P Index fell 14% during December 2022, while the DigitalX Bitcoin Fund only fell 0.3% and the DigitalX Fund fell 3.7%.

But spare a thought for investors in the company’s ASX shares, who have dusted roughly two thirds of their money in 12 months.

DigitalX (ASX:DCC) share price chart (Graph: TradingView)

Will 2023 be better?

DigitalX told investors that it would continue to position itself as a safe pair of hands in the digital asset management space.

Ongoing investment themes would include real world asset tokenisation, decentralised data, digital identity opportunities and Web 3.0 infrastructure across decentralised application networks.

Although it said that institutional adoption of Web 3.0 products would accelerate in 2023, investors should expect further volatility across digital asset markets as well as financial markets more generally.

As if the collapse of FTX was not a big enough shockwave, DigitalX said markets would continue to navigate the collapse and potentially even see more down the line. Nice outlook!