Why Functionality In Digital Assets Matters
Digital assets initially emerged as a new means of transferring value across the internet. Since then the sector has expanded into different categories and sectors within a growing digital economy.
For investors, the most useful question is no longer only “what is the price” but “what does this asset actually do?”
Scott Lester, Director at Crossgate Capital says the firm has built its approach around that idea. “The company considers functionality and utility, and in this regard, we ask of every asset in the portfolio, what problem is it trying to solve?
Bitcoin is the best-known crypto asset, created as a digital system that allows value to move from one party to another without traditional intermediaries. It has become a reference point for the broader sector and still sits at the core of many crypto portfolios. Holding Bitcoin gives investors exposure to the original use case of digital assets as a store and transfer of value.
Beyond payments, there are smart contract platforms such as Ethereum. These networks provide the base layer on which developers build applications. For example, smart contracts enable the creation of services that run automatically when conditions are met. That functionality supports decentralised finance, tokenised assets and many other services that are still emerging.
Crossgate Capital’s strategy is designed to benefit from both established growth and cutting-edge innovation by providing exposure to core assets like Bitcoin and Ethereum and a curated selection of innovative projects that tap into the sector's growth potential.
“Some support lending and borrowing within decentralised finance. Others provide data from outside blockchains so that contracts can respond to real-world events. Several newer projects work at the intersection of artificial intelligence and digital asset networks. In each case, the asset has a defined role within a system that solves a particular problem,” says Lester.
“The goal is to reflect the breadth of real activity in the sector, not just its most familiar names.”
Lester says that to be considered for the portfolio, the crypto asset must have a market capitalisation of at least NZ$500 million (at date of purchase) and have a genuine use case.
“We ask what service the network provides, who is or will use it and whether it sits in a part of the market that is developing in a sustained way. This helps focus attention on projects that play a recognisable role rather than short-lived themes.”
This focus on function also shapes how Crossgate Capital communicates with investors.
Reports describe the portfolio in terms of categories and sectors, not only individual tickers. Shareholders can see which part of their holding is linked to foundational assets, which part is linked to smart contract platforms, payments, lending, oracles, sports and which part gives exposure to newer areas such as machine learning. The aim is to make the structure of the digital economy visible inside a single investment.
For investors, thinking in terms of utility brings the sector closer to other asset classes. Just as an investor in traditional markets might distinguish between infrastructure, technology and financial services, Crossgate Capital encourages investors to see digital assets operating in a similar structure. Each asset in the portfolio represents a particular function or theme that can be understood and followed over time.
Crossgate Capital then does the detailed work of selecting, holding and monitoring those assets on behalf of shareholders.
The company is New Zealand-based, provides transparent reporting, and partners with institutional-grade service providers so that investors can focus on the bigger picture. What matters is not only that digital assets exist, but that they are doing useful work.
Crossgate Capital then does the detailed work of selecting, holding and monitoring those assets on behalf of shareholders.
The company is New Zealand-based, provides transparent reporting, and partners with institutional-grade service providers so that investors can focus on the bigger picture. What matters is not only that digital assets exist, but that they are doing useful work.
