DigitalX Limited (ASX: DCC) has announced plans to wind up its DigitalX Fund and Real World Asset Tokenisation Fund due to low revenue generation from these products. The company will redirect capital into higher revenue-generating business units.
DigitalX Fund performance and closure
The DigitalX Fund, launched in April 2018, has delivered a 377.4% return since inception and has been one of Australia’s top-performing digital asset funds in recent years. Despite its strong investment performance, DigitalX stated that revenues from the fund have not covered operational costs.
The company will work with investors to provide alternative digital asset investment options and ensure an orderly wind-down of the fund in the coming month. DigitalX’s own investment in the fund, valued at approximately $5.09 million, will be reallocated to more profitable ventures.
Failure to attract investment in Real World Asset Tokenisation Fund
The Real World Asset Tokenisation Fund, launched in June 2023, failed to attract external investment beyond DigitalX’s initial $1 million commitment. The company cited the slow adoption of tokenisation in mainstream finance as a key challenge.
DigitalX chair Toby Hicks commented on the decision:
“The DigitalX Fund has been a fantastic investment for long-term investors and has been one of the top-performing funds in Australia for a number of years. However, unfortunately, the DigitalX Fund has not been as lucrative for DigitalX, where revenues received have continued to be below the costs of operating and maintaining the fund.
In addition, the Real World Asset Tokenisation Fund has failed to attract investment. Tokenisation of real-world assets has not caught on in the mainstream at this time, and seeking investment for these types of projects has been difficult for most tokenisation projects globally.”
No impact on Bitcoin ETF
DigitalX confirmed that the fund closures will not affect its spot Bitcoin ETF (ASX: BTXX), which continues to expand. The company remains focused on digital asset ETFs and is monitoring regulatory developments for potential expansion in this area.
