Letter to Cryptology Asset Group Shareholders - Seite 2

Worse still, industry participants who were barely old enough to drink alcohol got drunk on their own “success”, fueling this “crypto industry” insanity, and doing so pretty openly. They spoke of “ponzinomics” and named digital assets as if they were infants just learning to speak. The new “crypto industry” got cocky and arrogant, and the emperor has now been exposed wearing no clothes.

We are proud to say that we have never participated in this insanity. As I have highlighted, our portfolio is laser focused on Bitcoin and infrastructure providers around it. Even the few venture funds we have invested in share a similar focus. As such, I am extremely proud to say that we at Cryptology have ZERO direct exposure to FTX and its collapse, nor do ANY of our portfolio companies or funds have any direct exposure or losses due to FTX that we are aware of.

Moving forward, the only strategic adjustment we are making is to cut back a bit on our plan to invest up to USD 100m in crypto/Bitcoin venture funds. In truth, we have not seen many funds we have liked over the last 12 or so months and have invested a few million dollars in only a handful. We have decided to stay laser-focused on our core portfolio companies we feel very comfortable with.

Looking at the current situation, we believe in two guiding principles:

1) Excess is bad, but don’t throw the baby out with the bathwater

Seeing through all the industry noise – the hype in the past and now the negative tone - we are still – or actually more than ever – 100% convinced Bitcoin enables a superior and more inclusive economy… something the world desperately needs. Bitcoin truly is digital gold, and the hardest form of money today. When it takes this rightful place as the ultimate store of value – or even if it shares such a title with gold for many decades – it regardless has a bright future ahead.

Bitcoin is truly decentralized and actively used by over 200 million people around the world. It is secured by the strongest computing network in the world — one of the single greatest engineering feats in human history. When the confidence game is over for the “crypto industry”, we are resolute the market will come back to Bitcoin.