Revolut posts losses despite cryptocurrency boom
Revolut, the currency exchange and payments provider fintech based out of the UK, has announced that its losses almost doubled for last year though the prices of cryptos traded on its platform and the revenue generated from trading cryptos at Revolut had shot up towards the end of the year.
The company said that it had managed to make around £39 million on its cryptocurrency investments and the surge in prices and demand for crypto over last year helped it to push its revenue up by 34% to £222 million by the end of the year.
Its finance chief, Mikko Salovaara, said the company went on to experience “very strong profitability in the first quarter” of 2021, but would not confirm whether it was heading for its first annual pretax profit on record. “We don’t give any forecasts, but so far so good,” he said.
The revenues were strong and the company also said that it was profitable towards the end of the year but the payments made out to resources and share payout led to a pre-tax loss of £207,875 which is almost double the £107,680 loss that the company had suffered in 2019.
Revolut has been very aggressive with its crypto policy as it has been adding more cryptos to its platforms. It recently added uniswap and Cardano to its platform to add to bitcoin, ethereum and other cryptos that are already available for trading on the platform. This is despite the fact that the world over, especially in countries like the US and UK, the regulators continue to view cryptos sceptically and are looking at ways and means of controlling its flow.
China has already ordered all the mining activity to be shut down on its territory and the SEC in the US is still in 2 minds on whether to approve ETFs and other investment products based on cryptocurrencies. If the regulators in the UK also begin to crack down on cryptocurrency-related firms, then companies like Revolut could face issues.
But on the other hand, there has been growing interest among retail and institutional investors for the various cryptos and it is only a matter of time before regulators also begin to accept that this is an irreversible change. It is indeed good for the crypto industry in the long term to get regulated but the regulation should be more focussed on how to control money laundering and financial crime through cryptos rather than looking to cut down on crypto growth altogether.