Hong Kong-based Animoca, which was removed from the ASX as a $120 million company in 2020 for swapping stock for crypto tokens, is one of C1’s targets. Since its exit from the ASX, Animoca has ballooned into a $7.8 billion private company, with venture backing from Sydney-based Koda Capital and KTM Ventures. At the company’s last capital raise, shares were sold at around $4.50. The Financial Review understands C1 Fund has offered to buy them at around $1.12.
Chainalysis, which provides investigation and blockchain analysis services for companies and law enforcement agencies alike, is also in C1’s sights.
The US-based Chainalysis was last valued at $US8.4 billion in 2022, and C1 Fund has told its investors there are around $30 million of secondary preferred shares available at around $US15 a share. This represents a 63 per cent discount to Chainalysis’ last capital raise.
But high-profile crypto gaming developer Immutable, which has raised almost $400 million in venture capital, does not seem to be on C1 Fund’s radar. Immutable’s last Series C capital raise valued the Sydney-based company at $US2.5 billion. Earlier this year, Immutable was found to have cut the price of its shares for employees by almost two-thirds as valuations across the tech industry took a hit.
The company has said C1 Fund has not approached it or its investors to acquire secondary shares, and that its last secondary sale involved US-based venture firm PrinceVille acquiring shares at the $US2.5 billion valuation.
While C1 Fund is pitching itself as a partner to help venture investors free up cash, few local investors seem inclined to let go of any investments that have withstood the years-long downturn in crypto activity.
Local crypto exchanges, like Independent Reserve and BTC Markets, have enjoyed a surge of new customers after the founder of the world’s largest exchange Binance pleaded guilty to money laundering charges last month.
Investors abandoned the Binance exchange in favour of locally regulated operators which have reported as much as a 50 per cent surge in trading volumes.
Over the past few years, crypto prices have languished while high-profile crypto frauds dominated headlines and investors baulked at risky assets as interest rates rise. But the prospect of US regulators approving a bitcoin ETF in January has prompted a modest recovery.
Investors believe the ETF approval will pave the way for Wall Street players such as BlackRock and Cathie Wood’s Ark Invest to market the funds to massive swaths of new investors.
Another driver of the price recovery is a technical upgrade to the bitcoin network, which is set to take place in May. The upgrade will reduce the number of tokens that bitcoin miners receive to help cap supply at 21 million tokens. In each of the last three events, the bitcoin price hit a record.
