DigitalX Limited (ASX: DCC) has announced plans to wind down its DigitalX Fund and Real World Asset Tokenisation Fund due to insufficient revenue generation. The company will redirect capital into business units with stronger profitability potential.
DigitalX Fund Closure Despite Strong Returns
Launched in April 2018, the DigitalX Fund has delivered an impressive 377.4% return since inception, positioning itself as one of Australia’s top-performing digital asset funds. However, despite its strong investment track record, the fund’s revenue has failed to cover operational costs.
To facilitate the transition, DigitalX will work closely with investors to explore alternative digital asset investment options while ensuring an orderly wind-down in the coming month. The company’s own $5.09 million stake in the fund will be reallocated to higher-yielding business opportunities.
Lack of Investor Interest in Tokenisation Fund
The Real World Asset Tokenisation Fund, introduced in June 2023, struggled to attract external investment beyond DigitalX’s initial $1 million commitment. The slow adoption of tokenisation in mainstream finance was cited as a primary obstacle.
DigitalX Chair Toby Hicks acknowledged the challenges, stating:
“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.”
With these closures, DigitalX aims to focus on ventures with stronger revenue potential, adapting to the evolving digital asset landscape.
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