INX Digital Posts Gains Amidst Summer Slump in Equities, CryptoThe summer of 2023 will not be remembered as one that was kind to equity traders. Over the course of the last month alone, all major stock indices in the US like AMEX:SPY NASDAQ:QQQ and DJ:DJI closed in the red as investor sentiment wavered in the face sky-high interest rates, growing consumer debt, an economic slowdown in China, and overall low summertime liquidity. These macro factor also impacted crypto markets, with BITSTAMP:BTCUSD experiencing a 12% drop on August 17th, dragging down major cryptocurrencies with it like BITSTAMP:XRPUSD and $BINANCE:BNBUSD. Triggers cited as responsible for this crypto slump include low trade volumes leading to heightened volatility, alongside China's economic ills and a potential sell-off by SpaceX to raise capital.
Despite these summer doldrums, INX Digital NEO:INXD share price rose by +15% over the past month and >100% over the past 3 months. These massive gains buck the trend of bearish sentiment currently afflicting tech and crypto indices, and raises the central question: what is motivating this impressive run?
The first and most obvious catalyst is the strategic investment Republic Group closed with INX in mid-August. The investment specified a $5.25M stake in INX for 9.5% equity in the company's pre-money valuation. Given Republic Group's status as an established FSIB player based out of NYC, this deal testifies to the increasing demand for INX's regulatory approach to tokenization and the exchange of digital assets that has arisen as a result of ever more vocal calls for federal regulation of the crypto space. Amidst the SEC-Ripple litigation and the announcement of a crypto-taxation schema, investors are girding themselves what looks like the imminent roll-out of more comprehensive regulation. This eventuality clearly works to INX's advantage given its status as a first-mover in the regulated blockchain space, and is attracting more attention from the world of traditional finance.
Another catalyst behind INXD's recent gains are its favorable Q2 '23 financials, highlights of which included a sharp increase in new customer registrations and size of funds held, as well as a 161% increase in revenue relative to Q2 '22. With new customers and funds flowing in and a steadily improving bottom line, INX's financial position indicates the company is on solid footing that will support forward growth.
he past few months have proven a decisive period for INX. Share price broke-out from a longtime plateau to the 0.35 -0.40 range on the heels of a successfully closed strategic investment. Fundamentals remain strong, and looking forward to Q4 it looks like macro-global market forces are accelerating the advent of a regulated crypto space, which may open the door to additional and even bigger strategic investments or M&A activity around INX's fully compliant approach.
