CoinShares Q1 Earnings Slide, Retail Remains Focus, Execs Say

Until European institutional investors show greater interest in crypto, CoinShares is going to double down on its retail strategy

article-image

Blockworks Exclusive Art by axel rangel

share

key takeaways

  • After reporting record fourth quarter 2021 earnings, CoinShares has seen a significant pullback in 2022
  • A prolonged sell-off in digital assets coupled with increased costs led the company to report a 45% year-over-year slide in its EBITDA

Digital asset manager CoinShares is the latest publicly traded company to take a hit from the markets’ broad risk-off sentiment, its latest earnings report shows.

Coming off a record fourth quarter that saw the asset manager notch its highest quarterly earnings and assets under management, the first quarter of 2022 was a notable retraction. 

CoinShares’ adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2022 was 18.7 million British pounds ($23.4 million), a 45% slide from a year ago.

The slump can primarily be attributed to an overall pullback in capital markets performance and an increase in cost base, predominantly driven by hiring and launching new investment products, CoinShares Chief Financial Officer Richard Nash said on Tuesday’s earnings call.

“As one would expect, the group performance has of course been impacted by the market conditions that everyone’s experiencing in the first quarter of 2022,” Nash said.

Comprehensive income, which accounts for the change in the value of the company’s digital asset holdings, fell to 20.2 million British pounds, down from 32.1 million British pounds a year earlier. Assets under management for its ETP suite was 3.07 billion British pounds for the first quarter, a slight decrease from the fourth quarter of 2021.

Across CoinShares’ product suite, the company generated combined management fees of 17.2 million British pounds, which is relatively unchanged from the figure in 2021. The company is continuing to focus on diversifying its revenue streams away from management fees as it increases its product suite and offers zero-fee options, Nash said. 

During the first quarter, the asset manager launched the first ever staked ETPs (exchange-traded products), which have zero management fees. The products allow investors to take a portion of the staking rewards each day, which has paid off, Nash said, as CoinShares ETPs saw the largest net inflows in the first quarter across alternative coins. 

“There has been a big theme, especially in the US, around institutional adoption,” CoinShares CEO Jean-Marie Mognetti said. “But…institutional demand is not clearly there yet in Europe, we have to focus on something else, which is a retail model.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Do Kwon may miss the start of the March 25 trial in the SEC’s case against the former executive and Terraform Labs

article-image

Riot Platforms bought 31,500 more mining machines while CleanSpark has begun operating in Mississippi

article-image

Dencun was activated on all testnets, a blog post Tuesday said

article-image

Hut 8 also announced it broke ground on a Texas mining site

article-image

Uniswap aims to become a “complete platform for swapping” following its latest product releases

article-image

Continued demand for bitcoin ETFs coupled with greater demand for bitcoin from exchanges is contributing to price moves, analysts say