Bitcoin made in Germany (Advanced Blockchain AG + Smart Equity AG)

Part of the Portfolio since ~2017...

In late 2017 a sleepy Berlin-listed micro-cap called BrainCloud AG performed the single most lucrative act available to a company with very little going on: it changed its name.

Out went BrainCloud; in came Advanced Blockchain AG. The magic word had been spoken, and the market, as ever, came running.

The business model is a venture-style holding company: it takes stakes in blockchain projects and start-ups. Its first investment was a firm called nakamo.to – a wink at Satoshi Nakamoto – and the portfolio later grew to include ventures like peaq and various DeFi plays. Nothing inherently disreputable; venture investing is a legitimate trade. The trouble is what happens when you wrap it in a listed shell during a speculative frenzy.

Because the assets here are a basket of illiquid stakes and tokens, and illiquid things are worth precisely what the last excitable print says they are. In the 2021 crypto mania, that print kept rising, so the company’s net asset value – and its share price – went vertical, climbing roughly twenty-fold. Consider the peaq token: it launched in December 2021 at $0.25 and touched $0.75; at a price of $0.60, Advanced Blockchain’s stake was reckoned to be worth around $54 million. On paper. In a market where every line was green.

This is the central conjuring trick of the genre, and it is worth naming plainly: net asset value built from things that do not trade is net asset make-believe. As long as the tokens are ascending and nobody needs to sell, the marks hold and everyone is a genius. The valuation is real in the way a dream is real – vivid, convincing, and gone the moment conditions change.

Conditions changed. The 2022 crypto winter repriced the entire asset class, and Advanced Blockchain’s portfolio re-rated with it. The share surrendered well over 90 per cent of its manic peak and today trades at around €1.82 – a couple of euros, much as it did before it discovered the word ‘blockchain.’

The museum is careful here: this is not an allegation of fraud. It is something more universal and more instructive. It is the specimen that shows how a name and a narrative can, for a season, manufacture an enormous valuation out of assets that no one can actually liquidate at the marks – the same mechanism that powered the dot-com ‘-online’ suffixes, and that powers every ‘AI’ rebrand you will read about this year.