Crossgate Capital extends its diversified NZ digital asset portfolio into staking
Crossgate Capital, the New Zealand-based digital-asset investment company operating since 2019, has extended its diversified portfolio strategy to include staking.
Eligible assets may be committed to help secure their blockchain networks and earn rewards in return, undertaken through BitGo, the institutional-grade provider Crossgate already uses for storage.
For much of crypto's history, holding digital assets has meant just that: buying coins and waiting for the price to change. Crossgate considers that staking can add another dimension to that approach.
Scott Lester, Director, Crossgate Capital says: "The question we've been asking ourselves is a simple one: why let crypto assets sit idle when they can work for you? Certain digital assets are designed so that the network itself pays rewards to holders who commit them to help secure it.
"If we hold those assets and the technical infrastructure exists to stake them through our institutional storage provider, it makes sense to put them to work. Long-term capital growth remains our primary objective, but we also consider it sensible to pursue a potential secondary source of return, with the risks managed carefully.”
WHAT IS STAKING?
Staking is native to proof-of-stake blockchain networks, such as Ethereum, Solana and Cardano. Rather than relying on energy-intensive mining, these networks are secured by participants who commit (or 'stake') their digital assets to support network operations. In return, the network pays rewards, typically in the same digital asset.
Where eligible assets in Crossgate's portfolio are staked and rewards are received, the Board may resolve to distribute some or all of that staking income to shareholders, after fees and applicable tax. Distributions are variable, not guaranteed, and declared at the Board's discretion.
DIVERSIFICATION AS THE FOUNDATION
Crossgate's staking approach is built on the diversified portfolio the company has curated since 2019. That portfolio spans smart-contract platforms, blockchain infrastructure, financial services, artificial intelligence, entertainment, oracles and decentralised finance, with each asset selected as the company considers it has real-world utility.
Not all of those assets can be staked; eligibility depends on the network's design and on availability through Crossgate's institutional storage provider. The Board determines how much of each eligible holding is staked.
"Diversification has always been the foundation of what we do. We don't want investors relying on any single coin, and we don't want to rely on a single source of return either. A diversified portfolio combined with staking gives us two things at once: exposure to a curated group of digital assets we consider have genuine long-term utility, and the potential for distributions where staking rewards are received.
"It's a broader approach than simply buying and holding one or two coins," says Lester.
WHY INSTITUTIONAL INFRASTRUCTURE MATTERS
Staking done directly requires specialist technical capability, validator selection, key security and lock-up management. Getting any element wrong can cost rewards or expose the underlying assets to additional risk.
Crossgate accesses staking through BitGo's institutional-grade storage and staking platform, which provides the controls, systems and processes the company considers appropriate.
Lester says staking involves risks, as detailed in our Product Disclosure Statement. "The technical work of staking can be difficult, and doing it incorrectly can be costly. That's why we do it through institutional infrastructure, to help manage those risks.
"You hold the shares. We put the crypto to work. That's the whole proposition: a diversified New Zealand-managed crypto portfolio, long-term capital growth as the primary objective, and now the potential for distributions from staking rewards, without any of the complexity landing on the investor."
Crossgate's Product Disclosure Statement sets out the staking arrangements, the associated risks and the way any potential distributions would work.
