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Perth-headquartered crypto fund manager DigitalX (ASX: DCC) has secured strategic investment commitments from leading global web3 players to raise $20.7 million for its Bitcoin strategy, just five months after completing a raise for more than $15 million as it ramps up cryptocurrency holdings on the Solana blockchain platform.
The raise attracted CEOs of top publicly-listed global Bitcoin companies as well as executives and founders of major crypto investment funds, such as Simon Gerovich who leads the world's fourth-largest Bitcoin treasury company Metaplanet Inc.
Other backers include UTXO Management, ParaFi Capital and sole advisor Animoca Brands, a Hong Kong-based and formerly ASX-listed company which, in addition to extensive digital and cash assets, has US$564 million worth of minority investments in portfolio companies.
Animoca Brands' current director for capital markets, Leigh Travers, was a longstanding CEO of DigitalX before he left and led Binance Australia as CEO from August 2021 to July 2023. Last year Travers started his new role with Animoca, and came back to the DigitalX board in May.
He was one of two new directors appointed to the board, with the other being Ieva Guoga, the daughter of Solana Strategies Inc chair Antanas Guoga, known as 'Tony G', who invested $4.7 million in DigitalX in December last year.
As part of a more aggressive strategy to generate revenue from 'straking', whereby holders of crypto assets essentially lend them out to infrastructure providers for a fee of more crypto, in May DigitalX announced a partnership with Solana Strategies, which provides infrastructure for the open Solana platform with the cryptocurrency SOL.
At the end of May DigitalX held $30.5 million worth of SOL, $10.5 million in Bitcoin, and more than $32 million in DigitalX Bitcoin Exchange Traded Fund (ETF) units.
As a result of the latest investment, Animoca Brands co-founder and executive chairman Yat Siu will join the DigitalX advisory board, along with Hervé Larren, the CEO and founder leading US-based Web3 advisory firm Airvey.io.
While the shares are to be issued at a discounted price of 7.4 cents per share (cps), DCC shares have jumped 14.63 per cent to 9.4cps at 1:45pm AEST - their highest level since 2021.
"I'm excited to announce that after engaging with major global crypto equity investors, as well as our current major shareholders, it’s clear there’s very strong demand for a singular and focused digital asset treasury strategy centered on Bitcoin and listed on the ASX," says DigitalX non-executive chairman Leigh Travers.
"We have listened to this valuable feedback and are proud to welcome some of the largest and most well regarded crypto investors in the space to our cap table.
"We look forward to collaborating with our strategic shareholders and advisors to enhance our presence in both local and global markets and to execute on this Bitcoin strategy for DigitalX."
Travers' thoughts are echoed by DigitalX's interim CEO Demetrios Christou, who was promoted to the role from his position as general manager of finance in March.
"This strategic investment marks a significant milestone for DigitalX as we continue to focus on Bitcoin as the core of our treasury strategy," says Christou.
"The backing of these globally-recognised leaders in the Bitcoin space not only provides the capital to expand our Bitcoin holdings but also provides invaluable strategic expertise and access to their networks.
"This partnership ensures DigitalX is well-positioned to execute its focused strategy and deliver long-term value for our shareholders."
Yat Siu of Animoca Brands claims that partnerships with global heavyweights such as UTXO, ParaFi and others make DigitalX the "premier vehicle for Bitcoin access in Australia".
"Bitcoin is the reserve asset of Web3 - digital gold," he says.
"We are excited to expand broader access to Bitcoin in Australia with DigitalX to help empower communities with the tools for digital ownership and financial sovereignty."
DigitalX has been on an upward trajectory since it settled a long-running Federal Court dispute with co-founder and former CEO Alex Karis in December, in relation to the ownership of digital assets from the collapse of Japan’s Mt Gox Bitcoin Exchange in 2014.
Mt Gox, one of the largest crypto currency exchanges at the time, imploded following the loss of 744,408 Bitcoin due to an undetected hacking event that occurred three years earlier.
Karis, who resigned as CEO in 2016, officially made a claim on the assets via court action with the matter coming to a head in July 2024 as bankruptcy trustees to Mt Gox began forwarding payments to creditors from the collapse.
DigitalX, formerly known as Digital CC, secured a backdoor listing on the ASX in 2014 and had revealed in its prospectus that it had lost 351 Bitcoins from the collapse.
In March this year the company received 41.98 Bitcoin (BTC) following a recovery undertaken by Mt Gox's administrator, while at that time it also had received into its custody 52.48 Bitcoin Cash (BCH) and was entitled to receive a distribution of more than 18 million yen based.
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