DigitalX, Australia’s only ASX-listed crypto fund manager, has successfully raised A$20.7 million (US$13.5 million) to bolster its Bitcoin treasury. The funding round saw participation from notable digital asset investors, including Animoca Brands, UTXO Management, and ParaFi Capital. This strategic move aims to expand DigitalX’s Bitcoin holdings and establish a new advisory board featuring prominent figures in the digital asset space.
The placement, priced at A$0.074 (US$0.048) per share, offered investors one warrant for every two shares, exercisable at A$0.15 (US$0.10) with an 18-month expiration. Of the total funds raised, $12.8 million is earmarked for purchasing additional Bitcoin, while the remainder will cover operational costs and working capital. The announcement comes as DigitalX seeks to solidify its position in the evolving digital asset market.
Strategic Advisory Board Formation
In a significant development, DigitalX has appointed Yat Siu, Executive Chairman of Animoca Brands, and Web3 advisor Hervé Larren to its newly formed advisory board. Siu, a previous investor in DigitalX, shared his insights in an interview with Decrypt, emphasizing the strategic advantage of investing in Bitcoin through ASX-listed companies.
“As far as DCC is concerned, it made particular sense because in Australia you can invest via your superannuation funds (think 401k equivalent) in ASX companies, and it’s a good way to get exposure to the most recognized digital asset class being Bitcoin,” Siu stated. He highlighted DigitalX’s unique position as the only ASX-listed company actively accumulating Bitcoin.
The Bitcoin Strategy
Siu elaborated on Bitcoin’s role as a gateway to the broader digital asset ecosystem, advocating for its inclusion as a hedge and store of value. “We think everyone should hold some Bitcoin, if for no other reason than a hedge, and it’s most well understood as a store of value,” he explained. Siu believes that holding Bitcoin can lead to further engagement with other digital tokens and expand on-chain activity.
Addressing potential risks associated with Bitcoin-heavy strategies, Siu noted that the method of acquisition plays a crucial role. “In an equity raise, like this one, risk is fairly low. If it is debt, potentially higher, but it depends on what the security is,” he said. This cautious approach reflects the lessons learned from companies like MicroStrategy, which began aggressively purchasing Bitcoin in August 2020 through convertible debt offerings.
Historical Context and Market Trends
The trend of adding Bitcoin to corporate balance sheets gained momentum with MicroStrategy’s strategy under CEO Michael Saylor. The company has since become the largest corporate holder of Bitcoin, owning over 597,000 BTC. Similarly, Japan’s Metaplanet has positioned itself as “Asia’s MicroStrategy” by acquiring Bitcoin through a mix of equity and planned debt raises.
“The trend to put Bitcoin on the balance sheet is markets marketing too, not too dissimilar from other trends,” Siu remarked. He emphasized the importance of discerning whether companies are genuinely committed to long-term Bitcoin strategies or merely seeking attention.
Looking Ahead: DigitalX’s Future Plans
When questioned about the future scope of DigitalX’s Bitcoin strategy, Siu responded, “Deeper. This is the beginning, not the end.” His statement suggests that DigitalX is poised to further integrate Bitcoin into its strategic framework, potentially paving the way for increased participation in the digital asset market.
As DigitalX embarks on this ambitious journey, the involvement of industry leaders like Yat Siu and Hervé Larren on its advisory board underscores the company’s commitment to leveraging expert insights and navigating the complexities of the digital asset landscape. The move represents a calculated step towards reinforcing DigitalX’s market position and exploring new opportunities within the burgeoning digital economy.
