CoinShares reports first operational loss since going public

abdelaziz Fathi

Revenue at CoinShares fell in the second quarter from the previous one, weighed down by a decline in institutional investors’ interest in cryptocurrency trading.

CoinShares

Europe’s largest crypto asset manager said combined revenue, gains and other income was reported at £14.2 million, down from Q2 2021’s £19.6 million. Adjusted EBITDA also dropped sharply to £8.2 million from £28.6 million in the three months through June 2021.

In terms of its net income, Coinshares reported a loss of £0.1 million in the quarter ending June 30 from a positive income of £26.6 million the previous years. That was Coinshare’s its first negative quarter since going public in March 2021.

The company attributes the net loss to its TerraUSD (UST) holdings. The London-based firm recorded an “exceptional” loss of £17 million (roughly $21.4 million) from its exposure to Terra’s token when it exited its UST position.

“This financial impact of this episode, despite being relatively small when compared to the losses incurred by other players in our industry, has of course had a material impact on our quarter,” Coinshares CEO Jean-Marie Mognetti said in the report.

In the fourth quarter, CoinShares notched its highest quarterly earnings after surging crypto markets drove significant growth in its assets under management. However, due to lower demand for digital asset investment products, ETP assets under management (AUM) dropped to £3.07 billion from £3.4 billion as of 31 March 2022.

As the market environment has changed in the past three months, with cryptocurrencies under pressure, the institutional-favorite platform has experienced difficulties gaining confidence from investors. Though vowing to focus on “long-term growth,” as indicated in the report, the asset manager’s total comprehensive income for Q1 was £20.2 million, down from £32.1 million a year earlier.

CoinShares widens diversification strategy

Commenting on Q1 2022’s results, Jean-Marie Mognetti, CEO of CoinShares said:

“In light of the market turmoil we have reviewed our risk profile and moved into a more defensive mode. We have commenced taking steps to reduce both our cost base and various exposure across the group and this conservative approach will enable us to preserve our capital, ready to take advantage of opportunities in the digital asset space as they emerge.”

Other business highlights show that CoinShares has taken steps towards its long-term strategy, including progressing plans to uplist to the Nasdaq Stockholm Main Market, hiring a new head of marketing and communications with a dedicated team and integrating consumer platform, Napoleon.

Meanwhile, the group continues diversification of its asset management platform through the launch of 4 additional products within the CoinShares Physical product suite. Europe’s largest digital asset investment firm also bought additional 20% stake in digital bank FlowBank, which is licensed by the Swiss Financial Market Supervisory Authority.

The Jersey, Channel Islands-based firm had initially made an $11.8 million strategic investment in FlowBank back in October 2021. As per the recent shareholding pattern, CoinShares has paid $25 million to up its overall stake to 29.3%. As part of this transaction, the company was also granted voting rights equal to 32.06%.

Through its strategic investment, CoinShares says it allows its clients to leverage the Swiss banking’s heritage. Flowbank clients also can now invest in CoinShares’ crypto ETPs and other tokenised assets directly from their Flowbank account.

 

Read this next

Digital Assets

Kraken acquires TradeStation’s cryptocurrency business

Kraken, the second-largest U.S.-based cryptocurrency exchange, has acquired the cryptocurrency arm of online brokerage TradeStation.

Retail FX

The Funded Trader is back? Traders report account closures

Prop trading firm The Funded Trader has updated its website with a few banners, nearly three weeks after it ceased all operations, with claims for a relaunch in the near future. However, there was no official statement on the relaunch on its website, Discord channel, or social media accounts yet.

Executive Moves

NAGA lures former Tickmill compliance exec Loukia Matsia

NAGA Group, a provider of brokerage services, cryptocurrency platform NAGAX and neo-banking app NAGA Pay, appointed Loukia Matsia as their new Head of Compliance and Anti-Money Laundering (AML).

blockdag

Explore 2024’s Top Cryptocurrencies: BlockDAG Leads With 30,000x ROI Potential, Among Surge Predictions For Bitcoin And Ethereum

Navigating the vast ocean of cryptocurrencies might feel overwhelming for many investors, whether seasoned or newbies.

Tech and Fundamental, Technical Analysis

EURUSD Technical Analysis Report 18 April, 2024

EURUSD currency pair can be expected to fall further toward the next support level 1.0600 (which reversed the price earlier this month).

Digital Assets

Binance ordered to remove Changpeng Zhao to get Dubai license

Binance, the world’s largest cryptocurrency exchange, has obtained a Virtual Asset Service Provider (VASP) license in Dubai.

Crypto Insider

Evolution and current state of global crypto adoption

Every four years, the crypto world gets hyped for the Bitcoin halving. Past halvings, like the one of May 2020, saw a massive increase in BTC transactions, which was driven by growing adoption and community involvement.

Digital Assets

Binance set to re-enter India with $2 million fine settlement

Binance, the world’s largest cryptocurrency exchange, is preparing to re-enter the Indian market after agreeing to pay a $2 million fine, according to a report by the Economic Times.

Chainwire

Over 1,000 Builders, Partners, Investors and Enthusiasts Gather at Inaugural Global Event to Celebrate Sui

Last week in Paris, over 1,000 blockchain enthusiasts from 65 countries gathered at the inaugural Sui Basecamp during Paris Blockchain Week. This milestone event showcased major announcements and drew a global community, highlighting Sui’s impactful strides in blockchain technology.

<