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Cypherpunk Holdings (CSE:HODL/OTC:KHRIF), the company building a portfolio of assets in the area of privacy technology and assets, has reported that as of 31 March it held over $22m in cryptocurrencies. The company also held over $10m in cash or cash equivalents and a further $1.7m in investments.

HODL has carved out a niche for itself by starting to build an interesting portfolio of assets in the digital privacy space, including in cryptocurrency infrastructure. It represents a visionary take on the future of privacy and the sort of companies that could play a role in helping to protect that in the future.

Proxy deadline for upcoming AGM is 14 June

Cypherpunk has an upcoming AGM scheduled for 16 June and a proxy voting deadline attached to that of 14 June. Investors in the stock are being asked to cast their votes on resolutions raised in the management information circular ahead of that deadline. The board of directors is recommending that shareholders vote for all the proposed resolutions.

Cryptocurrency valuations seem to be fluctuating rapidly at the moment, so it is hard to keep up with valuations outside day to day monitoring. Cypherpunk’s two principal cryptocurrency holdings were in Bitcoin and Monero on 31 March. The company held slightly less than 300 Bitcoin at that time. Total cryptocurrencies were valued at $22.169m at that time. Cypherpunk has added to this however, and as of 2 June held 360 Bitcoin in its treasury plus over C$6m in cash.

Its cryptocurrency holdings are classified as current assets in its report, based on the assessment that they are currently considered to be commodities and can potentially be sold into liquid markets where it is possible to generate a profit from price fluctuations. The crypto holdings are being valued under IAS 2 (Inventories). The fair value is being measured using a fair value or market approach.

Equity stakes include Sixty Six Capital

The company reported a total value of $1.713m value for its equity stakes as at 31 March. Its most valuable holding is in the re-named Sixty Six Capital, formerly Hydro 66. This is the environmentally friendly crypto mining operation based in Sweden. It also has stakes in zkSNACKs Limited and Chia Network, the latter held via a SAFE deal rather than equity.

Cypherpunk received 19,860 shares (Series B) in the Chia Network following an earlier simple agreement for future equity worth $300,000 which was negotiated in July 2018. Chia Network was developed by Bram Cohen, the inventor of BitTorrent, to deliver an energy-efficient and decentralised blockchain. Chia Network has also launched its own cryptocurrency, called Chia.

Chia Network uses spare storage space on hard drives to verify blockchain transactions instead of using the energy-intensive “proof of work” model employed by other cryptocurrencies, which makes Chia an exciting “green” alternative to other digital currencies.

Cypherpunk has also recently confirmed that it has reached terms for a leasing arrangement for its portfolio of more than 16,000 IPv4 addresses. These were originally acquired in March. The deal will see the company lease these out under terms that should generate a 14.8% annual yield.

Cypherpunk Holdings currently has slightly over 6.3m warrants outstanding and exercisable with a weighted average life of 3.2 years.

Further information on AGM voting was circulated to investors by Cypherpunk and is available from a number of sources.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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