CoinShares’ revenue growth slammed into reverse as crypto volatility bites

abdelaziz Fathi

Revenue at CoinShares fell in the first 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 £27.96 million, down from Q1 2021’s £39.91 million. Adjusted EBITDA also halved to £18.7 million from £34.2 million in the three months through March 2021.

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:

“CoinShares has delivered a good first quarter with strong financial and operational progress. We delivered resilient EBITDA of £18.7 million, all while making considerable steps to advance our long-term strategy. This includes work towards our imminent uplisting to Stockholm’s main market, significantly growing our headcount, including a new Group Head of Marketing and a dedicated team to support the Group’s enlarged footprint, and integrating our consumer platform, Napoleon. We are continuing to invest in our long-term future, and the Group is well positioned to navigate the shifting global regulatory landscape for digital assets in 2022.”

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.

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