CoinShares Latest To Benefit From Booming Interest in European Crypto Products

Competition is growing in the crypto ETP space, including three new DeFi products from Fidelity Investments


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key takeaways

  • The company defended its fees, saying they’ll remain unchanged, as assets and revenues ballooned
  • “Everyone is doing an ETP today — everyone wants to do one,” a CoinShares executive said

Thanks to explosive demand for digital asset investment products, European cryptocurrency asset manager CoinShares notched its highest quarterly earnings and assets under management Tuesday.

CoinShares reported a 1.6 billion pound, nearly $2.2 billion, year-over-year increase in ETP (exchange-traded product) assets under management between the fourth quarter of 2020 and the fourth quarter of 2021. The asset manager’s total comprehensive income for 2021 was 114.3 million pounds, or $155.4 million, up from 18.6 million pounds in 2020.

“Due to the correlation with digital asset prices and the all-time highs that we’ve experienced over the year, our products have benefited significantly,” Richard Nash, CoinShares’ chief financial officer, said on Tuesday’s earnings call. 

CoinShares’ ETPs generated 78.5 million pounds, or $106.7 million, in fees during the fourth quarter. The asset manager has already launched new ETPs this quarter, including the first such product with staking rewards built on the Tezos and Polkadot blockchains.

CoinShares is not the only asset manager profiting from the growing interest in digital asset ETPs.

Fidelity International became the latest issuer to offer a European ETP earlier this month with the launch of its Fidelity Physical Bitcoin ETP (FBTC) on Germany’s Deutsche Börse Xetra — the cheapest such European ETP. 21Shares, the world’s largest crypto ETP issuer, launched three new decentralized finance (DeFi) products in recent weeks.

Asked about competition, CoinShares executives acknowledged that the space is crowded. 

“Everyone is doing an ETP today — everyone wants to do one,” Jean-Marie Mognetti, CoinShares’ CEO, said. “I’m cognizant of the competition, and I welcome it because it’s much easier for CoinShares to show how good we are at doing what we’re doing when there are more people than one.”

Growing competition will not impact CoinShares’ current fee structure, at least for now, Mognetti added.

“I don’t think we are in a position where we have to drop off fees. You are not buying CoinShares and just CoinShares’ products, you’re buying CoinShares for the brand name,” Mognetti said. “It’s an all-in price…you’re buying the expertise.”

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