In its results for the year ended 31 December 2020, KR1 (KR1 ) reported a five-fold increase in net asset value as increased investor interest saw cryptocurrencies jump in value.
The digital asset firm reported that net asset value (NAV) was 28.97p as at 31 December 2020 compared with 5.72p per share a year earlier, an increase of 507% over the year.
KR1 reported ‘excellent returns’ on its investments in several projects while strengthening its staking revenue stream with multiple 'Proof-of-Stake' enabled assets, in particular Polkadot. Its assets grew to £37.8m as at 31 December 2020, up from £7.4m in FY19.
As a result, the Company reported a profit for the year of £30.3 million (FY19: £1.15 million).
KR1 said FY20 was a year of investing in many world class teams building exciting, innovative decentralised projects. ‘Some of them have already come to market and seen incredible traction post year end, such as Swarm and Lido and projects such as Acala, Moonbeam, Plasm (recently rebranded to Astar) and HydraDX,’ the Company highlighted to investors.
KR1 said its investments were made ‘at a time when digital asset markets were moving in an encouraging way, picking up towards the end of 2020 after facing extreme turmoil in the early stages of the pandemic, which left the its operations and portfolio unaffected.’
In particular, cryptocurrencies soared in value in 2020 with Bitcoin ("BTC") moving from the US$10,000 mark to a year end close just shy of US$30,000 whilst Ethereum ("ETH") increased just over US$130 at the start of the year towards around US$750 by year end.
KR1 said one of the most influential drivers of its recent performance, DOT, had not yet started to gain full momentum by year end and was trading in the range of US$5 to US$7 while similarly, Cosmos ("ATOM") was trading fairly flat around US$6 at that time. However, as digital assets reinforce their wider ‘macro’ appeal, prices have since surged, KR1 noted.
George McDonaugh and Keld Van Schreven, Managing Directors at KR1, said they believe the emerging digital asset ecosystem remains an investment opportunity without parallel.
They said this will form a revolution in two parts; “Firstly, a new financial system being built out and secondly, decentralised technologies forming the base layer for a new and better internet.”
“As proven by our long-standing successful track record, we have navigated the cyclical crypto markets, continuously invested and actively managed a growing portfolio of assets.
We have also built a sustainable revenue stream, alleviating the pressure to sell core investment assets for operations. All of this gives us the resilience we need for generating long term shareholder value and success into the future and enables us to be the premium choice in digital assets for public markets investors,” the Directors highlighted to investors.
View from Vox
Shares in KR1 have seen an over eight-fold increase since the start of 2021 as blockchain technologies and the cryptocurrencies receive an increased interest from investors.
KR1, whose focus lies in DeFi, Polkadot, Cosmos ecosystems, said it believes it is now strongly positioned for the digital asset markets entering a new bull market cycle.
Reasons to KR1
KR1 is one of Europe's leading digital asset investment firm supporting early stage blockchain and DeFi projects. It is a first investor in many key blockchain and DeFi projects that will power the decentralised platforms and protocols that form the emerging Web3 infrastructure.
Generating Material Revenue
KR1 unveiled in August 2020 that it had started generating material revenue from staking activities on the Polkadot network, its largest investment and portfolio holding to date.
The company has been staking activities on Polkadot to generate revenue on an ongoing basis following its migration to a ‘Proof-of-Stake’ blockchain network back in June 2020.
To date, KR1 holds a total of Polkadot 3,558,490.89 DOT tokens, post-re-denomination. This differs from its original DOT allocation as a result of the bonus pool of unlisted digital tokens allocated pursuant to KR1’s 2017 bonus scheme, which included Polkadot as an asset.
George McDonaugh, Managing Director and KR1’s Co-founder, described the launch of Polkadot as “a momentous event” in the group’s history and one that shareholders have been waiting for since KR1 backed the project in an early funding round in 2017.
Commenting on the group’s largest investment activities, McDonaugh told investors: “We are pleased to have locked in some profit at good prices and we're delighted that Polkadot is further expanding the Company's staking activities as a yield-bearing asset."
Positive Outlook for Blockchain and KR1
McDonaugh said KR1 is seeing huge interest flowing into numerous new projects building on Polkadot, many of which it has already supported, or currently in active discussions.
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