COINVEST SCI1 Update: September 2024

Today, we are pleased to present you the COINVEST SCI1 September 2024 Update. In this update, we look back at the past month and share valuable insights into our current developments and market assessments. To directly access the german update please click Here.

Market update

In September, there was a positive market development, leading to a rise in total market capitalization from USD 2.16 trillion by 11.46% to USD 2.41 trillion. Despite a slow start, Bitcoin saw an impressive price increase of 10.8% by the end of the month, marking its best September performance in history and standing out significantly from typically weaker results in previous years. At the end of September, the value of one Bitcoin was USD 64,500, still about 11.5% below its all-time high from March 2024.

Price Development

The price of the fund’s share started at EUR 163 in September, experiencing a temporary decline of 10%. However, by the end of the month, it achieved a positive performance, closing with a 5.4% increase at around EUR 174. The SCI1 outperformed Ethereum (ETH) by 2.5 percentage points in September but couldn’t match Bitcoin’s strong development.

The largest price gains were achieved by the tokens Cow Protocol (COW) with 31.5%, Optimism (OP) with 29.7%, and AAVE with 29.1%. AAVE, as in previous months, remained one of the strongest tokens in the portfolio. In total, six tokens of the SCI1 fund recorded price gains of more than 20% in September.

On the other hand, the Maker (MKR) token saw a price drop of 10.8%, reducing its portfolio allocation to around 5%. Staking and delegating revenues in September amounted to a total of EUR 16,500, which was added to the fund volume.

Portfolio Adjustments

In September, the position of the Uniswap (UNI) token was reduced by EUR 60,000. The sale provided liquid funds to increase the existing position of competitor Cow Protocol in SCI1 at a later date. COINVEST uses COW for its own transactions within the fund and is convinced of the project’s use case and growth potential.

Top 10 Active Positions

Fund Overview

The coinIX COINVEST SCI1 is an open special AIF (Alternative Investment Fund) managed by coinIX Capital GmbH , based in Hamburg. It invests in crypto assets traded on marketplaces. Up to 60% of the fund can be invested in individual assets, while up to 50% can be allocated to less volatile crypto assets, such as stablecoins. The goal is to build a portfolio of 15 to 25 positions without the use of leverage or hedging instruments.

The fund is only for professional or semi-professional investors. It may not be marketed to retail investors. Only the investment terms as of March 18, 2024, are valid for an investment in this fund.

The fund is suitable only for investors seeking a highly risky investment, given the high volatility of crypto assets and the additional risks associated with investing in them. Investors must be aware that a total loss of the invested capital is possible. There is no liability beyond the invested capital. Subscription to fund shares is only available to professional or semi-professional investors.

Crypto assets have shown significant value appreciation in the past for long-term investors, despite high volatility. The correlation with stock markets has generally been low. The fund offers risk-tolerant investors the opportunity to participate in the potential of this asset class.

Risks

Asset Class Risk: The TGV is exposed to risks related to a decline in acceptance and changing volatility in the crypto asset markets, as it is predominantly invested in crypto assets.

Portfolio Allocation Risk: There is no guarantee that the investment manager will successfully select appropriate strategies, investment funds, or asset managers, or that these entities will be successful in implementing their investment strategies.

Lack of Operational History Risk: The company and the TGV were established only in 2022. There is no assurance that the company, the TGV, or any portfolio within it will achieve its investment objectives.

Digital Assets Custody Risk: The custody of crypto assets is partly managed by an external custodian and partly through self-custody. Custody of digital assets presents a risk to the company.

Counterparty Risk: The investment manager may buy and sell instruments on exchanges or other trading platforms, which carries the risk that a counterparty may not settle a transaction according to its terms, leading to potential losses for the TGV.

Regulatory Risk: The regulation of digital assets and related products is continually evolving. Regulatory changes may affect the nature of an investment in the TGV or the ability of the TGV to continue its operations.

Fraud Risk: The company and the TGV are exposed to the risk of fraud by third-party service providers or by the company’s own officers or employees.

Cybersecurity Risk: A cybersecurity breach could lead to the loss or theft of funds, inability to access IT systems (“Denial of Services”), theft of protected information or company data, or costs associated with system repairs.

Funding Liquidity Risk: If investors redeem their investments in the company, the company or the TGV may need to liquidate additional assets to cover the redemption costs.

Staking Risk: Crypto assets may be used to participate in the operation of the respective blockchain (staking). There is a risk that staked crypto assets may be less liquid, and penalties may be incurred for rule violations.

Cross Class Liability Risk: If more than one class is issued for a particular fund portfolio, holders of these classes may be required to cover liabilities related to other classes of that fund portfolio.

Business Dependence on Key Individuals Risk: The success of the fund relies heavily on the expertise of key personnel at the company and its manager, who make investments on behalf of the TGV. A future loss of their services could negatively impact the performance of the company, the TGV, and the portfolios.

Fees & Expenses Risk: The investment manager is authorized to incur all expenses deemed necessary or desirable on behalf of the company and the TGV. Fees, allocations, and expenses incurred by the company and the TGV could be significant and may dilute the returns achieved by investors.

Currency Risk: Shares are issued and redeemed in the currency applicable to the respective class. The underlying assets held by the TGV may be denominated in other currencies. Changes in exchange rates could separately impact the gain or loss associated with the instruments held by the TGV.

Tax Consideration Risk: Applicable tax laws, regulations, or interpretations may change at any time, potentially retroactively. Accordingly, it is possible that the company and/or the TGV could be taxed on their investments and the income, profits, and gains derived from them in ways that are not currently foreseeable.

Volatility: Crypto assets can be extremely volatile and may lead to unpredictable changes in the assets within the fund.

About coinIX Capital GmbH

Since 2017, coinIX Capital GmbH, headquartered in Hamburg, has been at the forefront of analyzing blockchain projects and cryptocurrencies, facilitating investments in this dynamic sector. Comprising specialists with extensive experience in asset management, venture capital, and cutting-edge technology analysis, the coinIX team manages a portfolio boasting over 20 investments in blockchain startups alongside crypto assets. Shares of coinIX GmbH & Co. KGaA are listed on the free market of the Düsseldorf Stock Exchange and are also traded on the Berlin and Munich stock exchanges.

Check out the mwb Research report of coinIX: