We published our half year results which represented a ~43% loss in the GBP equivalent of our assets (net current assets) at the end of June 2018 relative to our portfolio at the end of 2017 (in the middle of the crypto boom).
As mentioned in the last blog, given the current crypto winter our results were expected and were already reflected in our share price as we’ve been in a crypto bear market since the beginning of 2018. Remember, this is an GBP equivalent unrealized accounting loss as the assets were not realised (sold). Once the crypto markets pick up again we should be back on track.
You can check out the full report here, featuring George putting the current downtrend into perspective.
“Since its invention in 2008, Bitcoin has lived through numerous market cycles. The longest downtrend lasted 415 days between 2013 and 2015, only then beginning its gradual rise to a crescendo in late 2017. During those two long nervous years, Bitcoin lost 83% of its previous value and the Bitcoin obituaries came thick and fast from the mainstream media. Yet the network statistics told a different story, Bitcoin the network was gaining wider adoption on all metrics and eventually the market caught up.
We’re currently in another downtrend, experiencing the same nervousness in the market as we did in the previous cycle, but instead of USD197 per Bitcoin the world watches on and winces at the current price of USD6,400. The market will undoubtedly consolidate at a ‘higher low’ in the near future as we will enter a new part of the adoption cycle. The difference this time is that we are seeing major moves into the space by some of the world’s largest financial institutions and because crypto assets are influenced by events and narratives, we see no reason why the market won’t catch up again as these institutions will allow greater access and spark a new wave of adoption.” — George McDonaugh, KR1 CEO
For even more context, another prominent fund we like and share deals with, Pantera, also posted a 40% loss since December, so we are in line with other top-players in the global crypto world.
In terms of institutional involvement, George’s post was written even before Yale endowment’s news about investing in $400m Paradigm (co-founded by one of Pantera’s early employees) and $300m a16z Crypto dropped :).
KR1 portfolio update (GNT, QTUM sells)
In terms of selling we’ve been busy over the last couple of months too, we recently announced a complete disposal of our remaining assets in the Golem (“GNT”) and Qtum (“QTUM”) projects, each at around a multiple of 20x from our initial investment. Both projects have reached very mature and self-sufficient stages, which fulfills our mission at KR1 as an early-stage capital provider and supporter, a role we held since the launch of both projects almost two years ago.
George again: “Today’s announcement marks the first time that KR1 has exited from a project’s stake in its entirety since the Company’s inception. Both projects employ large teams, have thriving communities, and early versions of their protocols are deployed and working well. It is also clear that there is increased competition in the respective verticals from projects like TrueBit, Dfinity or other platforms. It has been an incredibly exciting and hugely successful journey that KR1 shared with the Golem and Qtum projects over the last two years, and our stakes in both enabled us to engage in numerous other investments over that period. Should a discrepancy between their technical progress and market sentiment arise, we would happily take positions again.”
Out and About
Oslo Innovation Week
Janos was on a panel with Amber Baldet of Clovyr (the name sounds like a Web 2.0 startup but they’re building very important tools in the Web 3.0 & decentralised technologies stack!) at the Olso Innovation Week, hosted by the legendary Mike Butcher from Techcrunch.
‘We’re all in!’ at ETHBerlin
The ETH Hackathons, ETH Berlin being the first one in Europe, have quickly become known as THE credible ETH community events alongside EF’s DEVCON, ETHCC in Paris or Toronto’s EDCON this year. Lots of new companies and crews hacked away, presented and we were thrilled to be co-sponsors alongside Parity, CoinFund, MyCrypto, Messari and others.
Zero Knowledge Summit
Just before ETHBerlin, the Zero Knowledge Summit (#ZK0x02) was on, a highly technical summit, focusing on decentralised technologies and especially privacy. This one-day event was a fun “no-pitch” event, and had lots of cool snarky talks and some workshops.
Up Next!
Lots of action coming up for us at KR1 in October and later in the year!
Web3 Summit in Berlin
A Web3 Foundation-organised joint-decentralised-protocol meetup for the first time ever! Lots of our invested projects will be representing (Polkadot, Cosmos, Dfinity, OmiseGo, Melonport). All in Web3! More about the Web3 Summit here.
One of our key technical advisors Aaron will be giving the keynote, with Owen, another key advisory giving a workshop on what’s next.
Bpifrance Inno Génération in Paris
KR1 will be featured in an invite-only session with the top French VCs at one of France’s biggest tech event in Paris on 11 October to talk about all things crypto.
The Big Bitmeet
Student-led blockchain conference at UCL in London for all London students and everyone else interested in blockchain on 13 October 2018, linked here, THE BIG BITMEET.
George will dive into the history of KR1 from our inception in early 2016 and will share how it was like to start one of the first digital asset investment companies ever. There will be a blogpost incoming about the whole KR1 history later in Q4.
London & Dfinity
Arthur Falls is in town again and will host the Dfinity London meetup on 18 October and be around for the week before heading to the Web3 Summit the week after.
Devcon IV in Prague
It’s the biggie, it’s Devcon IV in Prague late October to early November, the main Ethereum event of the whole year. We’ll connect again with many projects and old partners from Asia and the US, hear the latest that’s going on, make new connections and get new hints on upcoming projects.
CV Summit in Crypto Valley Zug
Keld was invited to join CV Summit in Crypto Valley Zug, hosted by Lakestar and Lakeside, on a “investing in decentralised technology” panel, he’ll be there on 6 November.
