Galaxy Digital is now out-performing five Digital Assets ETFs.

The combined charts below are not so much about Galaxy Digital (BRPHF*) as implied above, but rather showing the return on Digital Asset company ETFs in general with Galaxy Digital being one of the Digital Asset Companies within many of the Digital Asset ETFs.

With that as an opening statement, our bigger point we are sharing, is that Digital Assets are very much worth owning. We are at the beginning of the Use and Application of Blockchain and Digital Assets. Galaxy is one way to participate but not the only way to participate.

Check out the twelve month returns for not only Galaxy digital buy the ETFs in this field.

Galaxy Digital was up 84.5%    BLOK ETF was up 38.34%       BITQ ETF was up 46.04%
ARKF ETF was up 33.76%        DAPP ETF was up 56.88%       BKCH ETF was up 51.01%

We like (and own) Galaxy Digital, in addition to considering a Digital Asset ETF, because within Galaxy’s Venture Capital Division, Galaxy is invested in more than 220 private companies engaged in development of commercial applications using Blockchain and Crypto. It is nearly impossible for you and me to access pre-IPO companies. The only practical way is buying into public companies that are engaged in this activity. There are not very many opportunities available to invest in Pre-IPO companies. Galaxy is one – Byond (below) is another.

Beyond (BYON) $23.00 – formerly Overstock, mentioned below, has a low profile investment in Pre-IPO Digital Assets called Medici Ventures. The partnership has investments in 19 private companies (including one unicorn) developing applications using Crypto and Blockchain technologies Link to Medici Ventures description here. The Market Cap for Beyond is relatively low at $1.1 billion. There was an analyst upgrade recently with a target price of $45 for the next twelve months. The average price target at TipRanks (linked here) is $32.50. This is the average target of eight analysts.

The Digital Asset ETFs are a broad brush way to participate in this industry. For those who accept the higher volatility of owning individual companies and wish to have the potential for even higher returns (or worse) knowledge of the companies that are Digital Assets.

Below are some names of Individual companies that are within the various Digital Asset ETFs listed above.

These names are from the top ten names in different from within the top ten holdings of different Digital Asset ETFs and their last twelve month price performances:

Coinbase (COIN) $129.22                      up 75.28% Bit Digital (BTBT) $2.59                       up 51.48%
Marathon Digital (MARA*) $18.20     up 142.35% Cleanspark (CLSK) $8.28                    up 142.1%
Block (SQ) $67.79                                   down 20.04% Bakkt Holdings (BKKT*) $1.38      down 19.2%
DraftKings (DKNG) $41.50                   up 155.5% MicroStrategy (MSTR) $500.00          up 142.3%
Shopify (SHOP) $82.93                         up 57.2% Beyond (BYON) $23.00                           down 6%
UiPath (PATH*) $23.44                        up 52.4% Galaxy Digital $7.14 (BRPHF*)              up 84%

Names LOTM likes that fit the Digital Asset category but not among the top ten in the ETFs mentioned are:

StoneCo (STNE*) $18.21 up 63.9% VersaBank (VBNK*) $11.12 up 41.8%

Bitcoin (BTC*) as a standalone crypto was up 84.2% over the last twelve months.

WHY are we introducing you to Digital Assets?

The point in introducing you to Digital Assets is this: We are just now beginning to apply Blockchain Technology to poential use and applications. Companies will be launched that rivel or exceed the companies mentioned below. Notice the time lag from when the internet was available to when these massivly successful companies came public and what they are today. The same is going to happen with Digital Assets. The fun is just beginning…

• The internet was brought to us, the public In 1993.
• Mass Use of the internet hit mainstream 2004 – 2005 time period.
• Amazon coming public in May 1997
• Google came public in august 2004
• Facebook (META) came public in May of 2012
• Netflix came public in May of 2002
• PayPal came public in 2002
• BLOCK (formerly Square) came public in 2015

This is a time period for Digital Assets is very similar to the launch of the Internet 1993 and the beginning of in the “mass addoption” of the internet 2004.

Crypto was introduced in 2010. The 2022 crash and the 2024 launch of the Bitcoin Spot ETF is the beginning of the Use and Adoption of Crypto and Blockchain and the companies offering these services. If you are resistent to Crypto, we will say let it go. Traditional Finance companies like Fidelity, Invesco, Wisdom Tree, VanEck and Bloackrock have embraced crypto. There is no stopping the trend.

It is very difficult, if not impossible to know ten years from now, who the Digital Asset leaders will be. It is an evolving story. Buying an ETF that focuses on this industry is one way to be engaged and with the rapid growth and changes of the industry. Certainly there will be times when the industry gets Overvalued and Undervalued. Risk management becomes very importand at such times. Decide now if you will 1) trade – Long-term or Short-term. Or if you will 2) buy and hold but dollar-cost-average into the positions over time. This chioice is often fdictated by your having disposable income or not. If retired and on a fixed income you might lean towards a longer-term system of trading.

The ETF managers will be aware of what is happening in the industry. They will buy companies as they gain critical mass or come public before you and I notice. That is why it is key to buy activly managed ETFs rather than the ETFs that are static, index based or only buy the largest companies in the industry. ARKF and BITQ are favorites. I also like DAPP and BLOK from this group. ARKF is the most different from the pack so ARKF would be one ETF I would want to own. You might buy a different Digital Asset ETF that would compliment ARKF but not be “as” corrilated as the rest of the pack are to each other.

Know your Companies. Know why you own them and know your Risk Tolerance. These are personal items we cannot know or help with unless we are coaching or mentoring you. In the later case we will not tell you what to do but inform you of your options and the Pros and Cons of those options.

LOTM Style – We are more a controlled speculator, than diversified investor or short-term trader. We allow 100% loss/risk on some purchases. Often, we dollar-cost-average into losing positions. Volatility is our friend, not something to be feared. We let our winners win, as much as possible. We love value, yet watch charts. Our goal is to find value stocks that might double in one to three-years.

Ideas in this blog are highly volatile and only for use by those who are comfortable with high-risk, high-reward investments.

Written February 3, 2024, by Tom Linzmeier

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