Similar to other tokenized hashrate products hitting the market (such as Blockstream's BMN token and Poolin's hashrate token), LMX makes it easier for a much broader spectrum of investors to access bitcoin mining, an investment space that typically has an extremely high barrier to entry. Unlike tokenized hashrate however, LMX holdings will scale with the overall mining operations of the fund's assets rather than be locked-in to a set and limited amount of hashrate.
Liquid Mining Fund is composed of multiple special purpose vehicles (SPVs) with each SPV coupled with the right to convert traditional equity holdings into digital securities via LMX. As of July 4th, 2021 (the 1 year anniversary of the initial closing), 100% of the investors in Liquid Mining Fund I (Fund 1) have exercised their conversion option to LMX, representing approximately $20M of value. Another $8M of LMX conversion options in Fund 2 (which closed in April 2021) will now become available as well.
"We are thrilled to see a 100% conversion rate with Fund 1, a significant milestone which should enable retail access via an ATS this summer," says Derek Boirun, CEO and founder of Realio. "Our investment thesis for Liquid Mining Fund is simple, find the lowest-cost producers of bitcoin with a capacity to scale, and invest early. Investor demand for bitcoin mining in the Americas is stronger than ever, especially considering recent events in China. Given the demand, we are now excited to launch our 3rd SPV with a target of $50M - $100M".
Realio anticipates the LMX digital security will be admitted for trading on the tZERO ATS, subject to customary due diligence, regulatory holding periods, and compliance with federal securities laws. The tZERO ATS is an alternative trading system that is operated by tZERO ATS, a FINRA member broker-dealer.
Bitcoin mining is emerging as a low-risk way for institutional investors to get sizable exposure to the asset class, as it requires large capital outlays yet maintains a similar risk profile to datacenters. By directly converting cheap/excess electricity into bitcoin, mining combines the cash-flow predictability of commercial real estate with the asymmetric upside potential of bitcoin.
Since Q1 of 2020, a growing number of institutional investors—including Microstrategy, Alliance Bernstein, BlackRock, and Paul Tudor Jones—have started investing in cryptocurrencies, offering funds and derivatives. In light of bitcoin's historic bull run from Q3 2020 to Q2 of 2021, investors continue to seek alternative exposure to the leading cryptocurrency, transforming bitcoin mining into a lucrative and monetizable operation for decentralized and centralized markets. Moreover, bitcoin mining can withstand bear markets considering the operations are coins mined as future assets. Operations have been monetized by going public as of late, with funds springing up around the trend and offering investing opportunities.
"The unique proposition we offer with Liquid Mining Fund and the LMX conversion will open up new avenues for the investor community that's seeking out structured bitcoin investment opportunities, without needing to invest directly in bitcoin," says Soohuck Chun, co-CIO and co-founder of Valentus Capital Management.
Realio initially launched Liquid Mining Fund in July 2020, with Fund I already returning 80 percent of invested capital.
Realio Technology LTD, is an end-to-end, blockchain-based SaaS platform for the issuance, investment, and life-cycle management of digital assets. Realio combines access to a decentralized (p2p) exchange with the features of a sophisticated issuance/investment platform to merge enterprise-grade blockchain solutions with institutional-quality investment vehicles. The platform satisfies the need for stringent securities regulations while allowing uniquely democratized access to investment products normally reserved for a select subset of institutional investors.
About Valentus Digital
Valentus Digital is an affiliate of Valentus Capital Management. Valentus Digital focuses on investment opportunities in the digitalization of real assets. Valentus Capital Management ("Valentus") is the Investment Manager of the Valentus Fund Limited Partnerships ("Valentus Funds"), founded on the core principles of nimbleness, agnostic investing, and innovation. We focus on value-oriented investment opportunities within the consumer and corporate-focused credit sectors. The company combines experienced investing through the peaks and troughs of credit cycles with disciplined and prudent capital deployment to identify attractive risk-adjusted opportunities for Valentus Funds.
About tZERO ATS
tZERO ATS, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. More information about tZERO ATS may be found at https://brokercheck.finra.org/. Digital securities that trade on tZERO ATS are conventional uncertificated securities. Ownership of such securities is reflected on the traditional books and records of regulated market participants. The term "digital" refers to the blockchain technology elements of a security that are intended to enhance investor experience through added transparency.
Algorand is building the technology to power the Future of Finance (FutureFi), the convergence of traditional and decentralized models into a unified system that is inclusive, frictionless, and secure. Founded by Turing Award-winning cryptographer Silvio Micali, Algorand developed a blockchain infrastructure that offers the interoperability and capacity to handle the volume of transactions needed for defi, financial institutions and governments to smoothly transition into FutureFi. The technology of choice for more than 500 global organizations, Algorand is enabling the simple creation of next generation financial products, protocols and exchange of value. For more information, visit www.algorand.com.
SOURCE Realio Technology LTD