Charles-Edouard Bilbault
Global Equities Portfolio Manager
Fund update: R-co Thematic Blockchain Global Equity — January 2025
Fund Focus
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08/01/2025
Klara Sok
R-co Thematic Blockchain Global Equity Co-Portfolio Manager
A paradigm shift
In December, investments into digital asset products remained solid, with US$7.5bn additional net inflows poured in over the first 3 weeks of the month 2. For the entire year of 2024, net investments into digital asset products hit a record US$44.2bn, 4x higher than previous record held in 2021 3. At the start of 2024, prominent asset managers like BlackRock and Fidelity introduced Bitcoin spot ETFs, paving the way for faster and broader adoption and incorporation into overall asset allocation strategies. 2024 also saw a significant surge in Blockchain integration by corporations, solidifying its status as a technological standard in several industries. For instance, the Luxury sector accelerated the issuance of digital passports using Blockchain technology, reaching over 50 million products through the Aura Blockchain consortium, co-founded by LVMH, Cartier, and Prada 3. The Shipping industry experienced a rapid increase in the use of blockchain-supported electronic bills of lading, which are projected to become the standard by 2030.
2024 proved as another year of strong performance with fund up +53% at the end of the year 4. Blockchain Infrastructure and Digital Assets categories contributed most to outperformance, led by Core Scientific, Galaxy Digital, Coinbase, Palantir and Northern Data. Core Scientific and Northern Data’s growth trajectory got heightened by their diversification to Gen AI related HPC (High Performance Computing). Galaxy Digital successfully expanded abroad, reached record AUM and kept advancing on its NASDAQ listing application. Coinbase proved to be the partner of choice of leading financial institutions like BlackRock, accelerated its product portfolio expansion namely on derivatives front, solidified its stablecoin exposure through Circle’s USDC reaching US$43.8bn market cap up 77% in 2024 2 and, last but not least, propelled its blockchain protocol Base to US$3.6bn of deposited assets (Total Value Locked) from US$440m at the beginning of the year 2.
Heading into 2025, expectations of regulatory clarity for digital assets and a supportive environment for digital innovation bolster the long-term investment prospects for the Blockchain theme more than ever. A real “paradigm shift” is being rolled out, supporting broader adoption of the technology. Shorter term, last FOMC 5 relatively hawkish stance overall lowered rate cut expectations for the coming year, which could favor market volatility and sporadically create interesting entry points. In this context, we remained active on portfolio management in December and purchased Blockchain Infrastructure and Digital Assets companies shares on second half of the month weakness and took some profits on outperforming companies like Palantir and Tesla. At the end of the month, equity exposure was 93.9%4.
Industry news to watch
Announcements made this month by established companies of blockchain-based innovations continued to pertain to various sectors of the economy and enterprise use-cases. Among many others:
DekaBank has obtained a bank crypto custody license from the German regulator BaFin and the European Central Bank (ECB).
Mizuho Securities issues private security tokens to fund solar partner business in partnership with Blue Sky Solar, using Nomura blockchain Boostry.
Deutsche Bank builds a Blockchain protocol aiming at addressing compliance requirements as part of its broader Blockchain program Dama 2.
[1] The synthetic risk indicator shows the level of risk of this product compared to others. It indicates the probability that this product will suffer losses in the event of market movements or our inability to pay you. Risk scale from 1 (lowest risk) to 7 (highest risk); the lowest category does not mean a "risk-free" investment. The risk category associated with this UCI is not guaranteed and may change over time.
[2] Bloomberg, January 2025.
[3] Coinshares, Digital Asset Fund Flows, data as of January 3rd 2025.
[4] Source: Rothschild & Co Asset Management, 31/12/2024.
[5] FOMC : Federal Open Market Committee - committee within the Federal Reserve System that is charged under United States law with overseeing the nation's open market operations
We have classified this product in risk class 6 of 7, which is a high risk class. This means that the potential losses associated with the future performance of the product are high and, if market conditions deteriorate, it is very likely that our ability to pay you will be affected. Other important risk factors not adequately covered by the indicator : Liquidity risk: Risk linked to the low liquidity of the underlying markets, which makes them sensitive to significant buying and selling movements.
Past performance is not a reliable indicator of future performance and is not constant over time. The characteristics/objectives/strategies mentioned above are indicative and subject to change without notice. This analysis is only valid at the time of writing. The geographical and sector allocations and distributions are not fixed and may change over time within the limits of the SICAV fund’s prospectus.
The information, comments and analyses in this document are provided for information purposes only and should not be construed as an investment or tax advice, or as an investment recommendation from Rothschild & Co Asset Management
[2] Bloomberg, January 2025.
[3] Coinshares, Digital Asset Fund Flows, data as of January 3rd 2025.
[4] Source: Rothschild & Co Asset Management, 31/12/2024.
[5] FOMC : Federal Open Market Committee - committee within the Federal Reserve System that is charged under United States law with overseeing the nation's open market operations
We have classified this product in risk class 6 of 7, which is a high risk class. This means that the potential losses associated with the future performance of the product are high and, if market conditions deteriorate, it is very likely that our ability to pay you will be affected. Other important risk factors not adequately covered by the indicator : Liquidity risk: Risk linked to the low liquidity of the underlying markets, which makes them sensitive to significant buying and selling movements.
Past performance is not a reliable indicator of future performance and is not constant over time. The characteristics/objectives/strategies mentioned above are indicative and subject to change without notice. This analysis is only valid at the time of writing. The geographical and sector allocations and distributions are not fixed and may change over time within the limits of the SICAV fund’s prospectus.
The information, comments and analyses in this document are provided for information purposes only and should not be construed as an investment or tax advice, or as an investment recommendation from Rothschild & Co Asset Management
