The year 2022 was really tough for Bitcoin, crypto and the global economy as a whole: Record inflation, plummeting share prices, skyrocketing rates and questionable (crypto related) policies created a period of uncertainty unlike anything we have seen in decades. Negative highlight was surely the alleged fraud / implosion of FTX, that destroyed trust into the whole crypto space and especially encouraged the skeptics. Positively, Cryptology is not particularly impacted by FTX fallout, thanks to its rigorous due diligence, focus on operational excellence and the unwillingness to sacrifice quality and fundamentals for greed.

Even better, the relatively low prices in the crypto space unlock interesting investment opportunities for buy and build companies such as Cryptology. To use the momentum, Cryptology acquired the US-based entity of its portfolio company “Deutsche Digital Asset” (DDA; former Iconic), end of last year. The Delaware/Cayman-based fund complex had long sat idle at DDA, while the firm focused on scaling its EU-based operations. The newly acquired platform is expected to be used to launch “Samara Alpha”, a crypto-focused Fund-of-Funds and Multi-Manager platform, investing in leading crypto asset managers. The platform should go live until the end of Q1. After building-up a meaningful track-record, Samara Alpha is expected to begin to seed emerging managers in the second half of the year. Cryptology will not only participate in the performance of its managers, but the upside of their growth as GP investors.

Cryptology´s overall portfolio is still dominated by the non-listed company Block.One (shares owned plus asset management upside), which contributes c. 84.3% to the total NAV. Northern Data remains the second biggest investment with c. 6.5% of the total NAV, despite the further share price decline (from € 17 to € 9.70 since the last update). The remaining six investments contribute a combined 3.7% to the NAV.

Since all seven investments in Cryptology´s portfolio are active in the crypto- and blockchain space, the total NAV was clearly impacted by last year’s weakness. Still, the bottom should have been reached and Cryptology should again grow its NAV after last year’s decline (see next page), thanks to numerous promising initiatives in the pipeline, a management with the ability to execute on these initiatives, the ongoing institutionalization of the overall blockchain and crypto space and crypto currencies that are heavily oversold and should increase from these levels again.

BUY with a new PT of € 4.50 (old: € 5.50) based on our SOTP.