DigitalX Funds Weekly Wrap (16-23 Dec 2022)
DigitalX Limited (ASX:DCC)
Transparent investment management at the intersection of technology and finance #Web3 #DigitalAssets
Statement on FTX, Alameda, BlockFi and Genesis.
The DigitalX Funds do not have any exposure to FTX, Alameda, BlockFi or Genesis.
As reported in the AFR article on November 8, our DigitalX actively managed fund liquidated our FTT holding on 7 November. FTT is now down 95% from our exit price. This demonstrates our disciplined risk management strategy, using a combination of top-down and bottom-up fundamental research to assess our portfolio composition. The majority of DigitalX Fund assets are secured with an institutional-grade custodian with insurance.
Weekly Price Action?
*All figures below are in USD unless otherwise specified.
Week in review
The Shift List
Market Updates
Macro/Regulatory Updates
In the spotlight?
CME Group and CF Benchmarks launched new DeFi reference rates and real-time indices for Aave, Curve, and Synthetix. The reference rates and real-time indices are not tradeable products, but transparent pricing for the three DeFi tokens will help users accurately mark crypto specific portfolios and develop structured products with greater confidence.
"These three new benchmarks, together with Uniswap launched earlier this year, will capture more than 40% of the total value locked in DeFi protocols on the Ethereum blockchain," CME Group Global Head of Cryptocurrency Products Giovanni Vicoso said earlier in the month.
Altcoins
Polygon has partnered with the neo-banking app Hi to introduce a platform that allows users to mint NFTs for a web3-focused debit card. Called the NFT Debit Mastercard, card holders can spend either crypto or fiat currencies at 90 million global merchants. Users can also mint any personal NFT, whether a holiday photo or profile picture, for the cover of their debit card without paying gas fees. The move marks the latest strategic partnership for Polygon, which is trying to become the face of gasless fees for NFTs. Polygon undergirds the Starbucks NFT loyalty rewards beta as well as new blockchain gaming features from Solana's biggest NFT marketplace, Magic Eden. Though Ethereum still dominates NFT trade volume by blockchain, Polygon has seen NFT transactions rise 1,648% from the first week of December to the second, according to The Block's Data Dashboard.?
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?itcoin (BTC)
Core Scientific, the largest Bitcoin miner by computing power, filed for Chapter 11 bankruptcy protection as this year's slump in crypto prices claimed another victim. The company estimated its assets and liabilities at between $1 billion and $10 billion, according to the filing with the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday. Core’s struggles reflect those of the entire mining industry, which has seen profit margins continuously shrink, as Bitcoin prices decline and energy costs go up. Revenues fell 20% just last month, according to data from The Block Research. Core Scientific estimated it had between 1,000 and 5,000 creditors, with $42.4 million owed to its largest creditor, financial services firm B. Riley. The company runs its own machines and acts as a hosting provider for others. Between the two sides, it operates about 24.4 EH/s, according to an October update, compared to the roughly 244 EH/s of the entire network.?
Bitcoin mining difficulty in October had its highest spike since last summer, when China cracked down on the industry and forced mining firms to flee to other countries. Meanwhile, its lowest ebb since then was just a few days ago. Now it's back up by 3.27%, according to the latest adjustment posted Monday by BTC.com. Why the yo-yoing? The reasons aren't completely clear to industry experts. A probable explanation is the switching on and off of machines depending on spot energy prices and profitability, with more efficient models also being deployed. But it also might be a case of luck, said Daniel Frumkin, director of research at Braiins.
Ethereum (ETH)
Payments processor Visa recently proposed a system known as “account abstraction” that uses smart contracts to enable automated programmable payments on Ethereum, per a crypto thought leadership post. This solution involves the creation of a smart contract that acts as an intermediary between a user account and a contract account, allowing for the creation of a self-custodial wallet that can make automatic recurring payments without requiring the active participation of the user. Such a move would allow recurring payments to be conducted entirely over blockchain networks, which currently are devoid of such capability, Visa said. The company proposed deploying the system on the Ethereum layer 2 network StarkNet.
CEO Comment
Who can believe 2022 is already over? If I had one word to describe the entirety of 2022 the word would have to be volatility (apologies if I state the obvious).?
My highlights are the huge positive flow of announcements and partnerships which found their way onto the shift list; and clearly my lowlights would be the fraud which took place in November, with the silver lining that the regulatory framework that we need may come sooner.?
The gap was steady at 55% this week and I believe regulation and the easing of contagion fears will be the driver for that to close in 2023. At this point we hope that 2023 will end up being the year of rebuilding trust in our markets.
This week I would also like to highlight an interview that was recently released by Bankless with Vitalik Buterin. Vitalik is the co-founder of Ethereum and I was inspired by his focus on values and his take on sectors. The financial rails ETH is built on will end up being the greenest financial rails in history which is why we continue to see the transition to Web3 as the greatest economic opportunity of our generation.
Vitalik’s top sector themes? and where the action will happen on Ethereum for 2023
Thanks for being our customers - just a reminder to all of our own purpose and values at DigitalX!
About DigitalX
DigitalX Ltd (ASX:DCC) is a leading ASX-Listed Bitcoin and digital asset funds management business. The Company has a 9 year track record mining Bitcoin, blockchain and smart contract development. DigitalX Asset Management is the investment manager of digital asset investment products that provide qualified investors with highly secure and streamlined access to digital asset exposure. To learn more contact the team at [email protected] or visit our website https://digitalx.fund/.
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