Dear Shareholders of Cryptology Asset Group,

Just when everybody thought the worst may be over in the crypto world, and just when first inflation prints have come in lower than expected, potentially allowing the FED to hike rates more slowly, the blow up of FTX may seem like a death kiss to the “crypto industry” to you.

Maybe, in a certain light, it actually is, which – you might be surprised to learn – doesn’t make us unhappy. The reason for this is because we at Cryptology have always disliked the notion of a “crypto” industry. We believe the “crypto” industry has gone astray from what we resoundingly believe should be, and is, a “BITCOIN industry”.

Allow me to explain… the “crypto industry” was JUST BITCOIN in the early years, from Bitcoin’s birth in 2009 to roughly 2014. Bitcoin, in this context, stands the test of time relative to its peers. Even now, in these difficult moments, it has a value proposition which is significantly more attractive today than ever before: a decentralized structure, a finite number of coins and an immutable ledger culminating in the ultimate store of value… DIGITAL GOLD. Bitcoin is the world’s hardest form of money and the unquestioned king of its industry.

The existence of Bitcoin justifies the existence of ancillary services like Bitcoin miners, exchanges, retail brokers etc. This is why our portfolio is focused on exactly that: a directional bet on Bitcoin via our stake in B1 and further stakes in a few ancillary service and infrastructure providers around Bitcoin. We prefer an extremely concentrated portfolio with high conviction over spreading out too broadly, diluting our beliefs. Thus, our investment thesis is formed.

Looking back at industry developments, with the rise of Bitcoin in 2014/15, people began craving “more”. Sometimes, however, it is very hard to recreate something which is itself, pretty perfect. This is where the “crypto industry” took a wrong turn. This turn widened the market scope from a “Bitcoin industry” to the “crypto industry”. As a result, thousands of crypto assets have been created and launched over the past few years – the vast majority of which will be, or already are, completely and utterly worthless. Massive leverage was taken by investors and issuers to prop up these worthless, illiquid coins, some of which were even used as collateral for debt themselves.

Worse still, industry participants who were barely old enough to drink alcohol got drunk on their own “success”, fueling this “crypto industry” insanity, and doing so pretty openly. They spoke of “ponzinomics” and named digital assets as if they were infants just learning to speak. The new “crypto industry” got cocky and arrogant, and the emperor has now been exposed wearing no clothes.

We are proud to say that we have never participated in this insanity. As I have highlighted, our portfolio is laser focused on Bitcoin and infrastructure providers around it. Even the few venture funds we have invested in share a similar focus. As such, I am extremely proud to say that we at Cryptology have ZERO direct exposure to FTX and its collapse, nor do ANY of our portfolio companies or funds have any direct exposure or losses due to FTX that we are aware of.

Moving forward, the only strategic adjustment we are making is to cut back a bit on our plan to invest up to USD 100m in crypto/Bitcoin venture funds. In truth, we have not seen many funds we have liked over the last 12 or so months and have invested a few million dollars in only a handful. We have decided to stay laser-focused on our core portfolio companies we feel very comfortable with.

Looking at the current situation, we believe in two guiding principles:

1) Excess is bad, but don’t throw the baby out with the bathwater

Seeing through all the industry noise – the hype in the past and now the negative tone - we are still – or actually more than ever – 100% convinced Bitcoin enables a superior and more inclusive economy… something the world desperately needs. Bitcoin truly is digital gold, and the hardest form of money today. When it takes this rightful place as the ultimate store of value – or even if it shares such a title with gold for many decades – it regardless has a bright future ahead.

Bitcoin is truly decentralized and actively used by over 200 million people around the world. It is secured by the strongest computing network in the world — one of the single greatest engineering feats in human history. When the confidence game is over for the “crypto industry”, we are resolute the market will come back to Bitcoin.

2) Just because there are bad actors, it doesn’t mean everything and everyone are bad

We are optimists. We give people the benefit of the doubt. And yes, once in a while, people will disappoint you. However much more often than not, people positively surprise us and bring immense value and happiness to our lives. Often this occurs in even the darkest times. People who let negative moments such as this define their behavior are often relegated to being miserable themselves. Even more important, such people miss out on amazing, substantiated future opportunities.

Just because Sam Bankman-Fried, the FTX CEO, turned out to be a bad actor, it doesn’t mean everybody else in the same industry is as well. A bad character is not an infectious disease, and we have met, and invested in, amazing entrepreneurs in the Bitcoin world. They share our long-term vision of the Bitcoin industry, and most importantly, they value the unquestionable integrity that is required to build outstanding companies.

We at Cryptology take a long-term view on the BITCOIN industry, and firmly believe that the companies we have invested in, like Northern Data and BULLISH, will profit from the current market consolidation in the short and medium term, ultimately winning in the long term. We focus on investing in builders, not speculators. The best builders prove themselves in tumultuous markets such as this.

As such, we see our own stock, and its directional bet on the Bitcoin industry, as the best investment available today. This is especially true with our shares trading at such a steep discount to Cryptology’s estimated NAV. Hence, we will continue buying back shares every day for the benefit of our shareholders.

I will leave you, our treasured shareholders, with a final thought… While the “crypto” industry may be dead, or at the very least, in need of a massive shakeout and revival, THE BITCOIN INDUSTRY IS MORE ALIVE THAN EVER!

Yours Sincerely,

Patrick Lowry, CEO

About Cryptology Asset Group p.l.c.

Cryptology Asset Group (German exchange, ISIN: MT0001770107; Ticker: CAP:GR) is a leading European holding company for Bitcoin and Blockchain-related business models. Cryptology was founded by Christian Angermayer's family office, Apeiron Investment Group, and crypto-legend Mike Novogratz. Noteworthy portfolio companies include Bitcoin behemoth B1, leading HPC data center operator Northern Data, commission-free online neobroker nextmarkets, and digital asset management group Iconic Holding.

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Cryptology Asset Group p.l.c.

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Sliema SLM 1707 Malta

E-mail: [email protected]