The DigitalX Ltd (ASX: DCC) share price is not having a fun day of trading on the ASX boards this Tuesday. At the time of writing, DigitalX shares are down a nasty 8.33% to 11 cents apiece.
Unfortunately, it gets worse for investors. This latest drop means the DigitalX share price is now down by roughly 30% from the 52-week high of 16 cents a share that we saw less than two weeks ago. I don't need to tell you that's a pretty devastating drop in such a short space of time.
So what happened to this now-former ASX high flyer? After all, DigitalX was a company that had delighted investors with a 150% surge just between 1 October and 15 November.
Well, it's not entirely clear. There have been no price-sensitive (or any, for that matter) announcements out of this company since 10 November.
As we covered at the time, that was the week when DigitalX announced its most recent cryptocurrency-related fund performances.
The company announced a new record high for funds under management (FUM) at the time, with $38.99 million in FUM as of 31 October, a 36.8% increase on the previous month. DigitalX's Bitcoin Fund and Digital Asset Fund both rose by an impressive 37.46% and 27.82% respectively over October as well.
But that was then, and this is now. So what could have gone wrong with this company?
Image source: Getty Images
DigitalX share price under-mined by Bitcoin?
The first and best place to look is the cryptocurrency markets themselves, since this is the space in which DigitalX operates and invests.
Looking at the price of Bitcoin (CRYPTO: BTC), we can see the flagship cryptocurrency has fallen 15.8% since making a new all-time high of close to US$67,000 a coin back on 8 November.
Today, one Bitcoin is asking just US$56,900 at the time of writing. We have seen similar trends play out for other cryptos like Ethereum (CRYPTO: ETH).
Such a steep fall in Bitcoin conceivably would have a large impact on a crypto fund manager like DigitalX. At least, that's what the market could be assuming.
Therefore, this is a very possible explanation as to why the DigitalX share price is getting hammered today and has been hammered since this dip in Bitcoin began earlier this month.
At the current DigitalX share price of 11 cents, this company has a market capitalisation of roughly $89 million.
