en Essential investment types for a robust blockchain portfolio:
coinIX Keynote at Blockchance Conference 2023
Hamburg, July 12th, 2023 -Blockchance Conference took place from 28th until 30th of June at Hamburg Congress Center. There were more than 5k attendees, 300 speakers and 150 exhibitors. Blockchance is Europe's leading Blockchain congress with the vision of emerging technology & a sustainable future. Blockchance conference aims to bring together a community of like-minded people, thought leaders and visionaries.
coinIX's Keynote took place on the first day of the conference and Mahsa Doorfard, our sales and marketing manager, explored essential investment types which are necessary to keep a diverse portfolio.
Usually people assume that investing in the blockchain industry means buying and holding the 10 top tokens; However, there are some other investment types as well. if you can manage to cover them all, you will have a promising diverse portfolio.
As a blockchain investment firm which also makes venture capital investments, we are exposed to opportunities which might not be available for retail investors and that’s what we’re here for.
Generally, there are the two big categories of investment at coinIX:
- Liquid coins and tokens in public markets (60-70% of our portfolio)
- Venture capital investments in private markets
Liquid Token
Liquid tokens are the classical tokens which can be publicly traded (Bitcoin, Ethereum, etc) less known smaller tokens will be in this category as well.
Through our investments in publicly tradable coins and tokens, we have the ability to identify trends in the market and target Investments in areas we believe to be promising.
Compared to the other investment forms, when it comes to Liquid tokens, It is easy to get in and out of a position. Additionally, these investments allow us to manage our liquidity based on the market trends.
Most of the liquid portfolios are an index of the Top 10 or 20 Tokens. What differentiates coinIX, is that we have an investment hypothesis and we make investments according to it. We pay attention to the smaller market cap coins and go beyond the Top 100 coins.
There is a lot of trash out there in the market and for a casual crypto investor, it is difficult to differentiate between solid and scam projects. However, this is what our analysts are doing on a daily basis.; they evaluate the projects and conduct due diligence.
With regards to our investment thesis at coinIX, we believe in the growth of the Ethereum ecosystem. That is also why our biggest holding is the ETH coin itself. Ethereum is the biggest smart contract blockchain and aims to be as decentral and permissionless as possible. What makes Ethereum different than the other Smart Contract blockchains is that they have efficiency gains in the short terms, but have security concerns in the long term.
Ethereum has the biggest and most vibrant developer community which actively works on the scalability while maintaining the decentralisation and security. Most of the projects that we have invested in, are getting built on the Ethereum network or are scaling solutions of Ethereum.
Additionally, Since the Merge has happened, it is now possible to earn a yield on Ethereum by staking it. coinIX also makes use of this advantage and secures the network at the same time.
SAFT
Our VC investments are generally divided into 2 types:
- Typical equity investments in startups (Just like the Web2 world)
- Early-stage token projects (SAFT agreements)
SAFT is the abbreviation of Simple agreement for future tokens. It is an investment contract in tokens of a web3 project, which are not publicly listed yet. When a company decides to raise money through tokens, it does not give away equity; which means investors do not participate in the earnings of the projected only profit from the increase of the token price. The utility of a token can vary quite a lot. The token needs to be careful not to be classified as a security. because that leads to a lot stricter regulations.
Not everyone has access to SAFTs because they are not listed on an exchange at this stage. This is where products such as coinIX come into play. Token projects are mostly proposed to us through our broad network or we actively approach early projects.
Because of the early stage and the low valuation of the project, the returns can be a lot higher compared to liquid tokens. Compared to VC investments in equity, the tokens are listed on an exchange much earlier (usually after 1-2 years) and therefore become liquid much earlier for us.
A very successful example from our portfolio is The Graph. It is one of the projects that we invested in, in the form of a simple agreement for future tokens. The Graph is an indexing protocol. for blockchain data, similar to what Google does for the internet. Therefore, it is also often referred to as the Google of blockchains. the protocol creates important infrastructure for Web 3.0 and makes blockchains searchable. We invested 46k EUR in the Graph back in 2020 and it is now worth around 1,5M EUR.
Equity
The second type of VC deals, are equity investments. Those can come in different forms:
- Typical equity investments in the form of shares
- Investments where shares are issued at a later point (Convertible loans and SAFEs)
You might ask yourself why would you invest in the shares of a company in the blockchain world? This is because not every company that uses blockchain, also needs a token as part of their business model. The longer you are in the space, the more you realize that very few projects actually need one.
In the area of equity investments, we are primarily interested in startups in the seed to series A phase, predominantly in Germany with an expanded focus on promising projects in Europe. Compared to tokens and SAFTs, it takes a lot longer before the shares can be sold and the company is listed or sold (usually between 6 - 10 years)
SAFE & Convertible Loan
SAFE is the abbreviation of Simple Agreement for Future Equity. It allows investors who put cash into a startup to convert that stake into Equity at a later date. A SAFE is an investment contract between a startup and an investor that gives the investor the right to receive equity of the company on certain triggering events such as sale of the company. When you invest in a company in the form of SAFE, the price will be lower than when you invest in the next equity financing.
One of our equity investments is FINEXITY. Using the FINEXITY platform, you can tokenize anything; Real estate, works of art, vintage cars, wine, or diamonds. All these assets have traditionally only been available to very wealthy investors and were previously less liquid and only tradable at great expense. Tokenization of tangible assets makes it possible for people with smaller budgets to invest in high value assets by buying a fraction of that asset.
coinIX
coinIX can be an investment vehicle for the blockchain asset class. We don’t just invest in crypto; we invest in the technology underneath. All of our investments are working on advancing blockchain infrastructure, using blockchain as part of their service, developing blockchain applications, or are directly involved in blockchain networks.
Additionally, we generate ongoing returns in the diversified crypto portfolio by staking the assets when it makes sense.
As mentioned before, blockchain investment does not just mean investing in some Top 10 coins. In order to participate in the full potential of the technology, you need to cover different forms of investments. However, not all forms are available to everyone. That is why we founded coinIX. access to some specific crypto assets would be only possible through products such as coinIX.
coinIX is the basis layer that you as an investor need, to cover the assets which otherwise wont be accissible to you.
About coinIX
coinIX GmbH & Co KGaA, based in Hamburg, is a listed investment company and has been investing in the broad spectrum of blockchain innovation since 2017. This includes the next level of digitalization in traditional industries, as well as new fields such as decentralized finance (DeFi) or NFT / Metaverse projects.
For this purpose, coinIX invests in equity of startups, early token projects and liquid cryptocurrencies. It offers a listed share that is traded on the open market of the Düsseldorf Stock Exchange.
(WKN: A2LQ1G | ISIN: DE000A2LQ1G5 | Ticker: XCX).