CoinShares Seeks To Reach More Investors by Upping Stake in FlowBank

Europe’s largest digital asset investment firm now owns nearly 30% of the Swiss bank


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key takeaways

  • FlowBank’s clients, which can invest in CoinShares’ crypto through derivative products, are set to have direct access to crypto in the third quarter
  • The bank will be able to take advantage of more advanced features such as holding, staking and lending in the coming months, according to CoinShares

CoinShares upped its stake in Swiss bank FlowBank as Europe’s largest digital asset investment firm seeks to reach a broader investor market looking for more advanced crypto exposure.

After buying a 9% stake in FlowBank in October, the company acquired nearly 21% more of the bank for roughly $26 million, CoinShares announced Monday.

The Jersey-based firm has no plans to further increase its stake, a spokesperson said.

Founded in 2020, FlowBank is licensed by the Swiss Financial Market Supervisory Authority (FINMA). It allows private and institutional investors the ability to trade 50,000 financial products — such as stocks, ETFs, bonds, options and contracts for difference (CFDs) — on its platforms.

Today, FlowBank’s clients can invest in CoinShares’ crypto through CFDs, derivative products that pay the difference in settlement price between the opening and closing of a trade. 

FlowBank offers 29 crypto pairs against US dollars, euros and Swiss francs, as well as crypto ETPs, a FlowBank spokesperson said. In the third quarter, it will provide clients with direct access to crypto.

“We have witnessed the growth of the crypto industry in recent years as well as the high demand,” the representative said in an email. “As a bank that wants to be at the forefront of its generation we believe in the potential of this asset class for our clients.”

FlowBank already uses Galata — a tech platform built by CoinShares that connects centralized finance platforms to digital asset protocols and markets — to offer digital assets exposure to its clients.

“In the coming months, FlowBank will be able to take advantage of more advanced features such as holding, staking and lending…and will offer exposure to a variety of digital assets to its clients thanks to Galata,” a CoinShares spokesperson told Blockworks.  

CoinShares has garnered more than $4 billion in assets under management at the end of 2021, the company reported last month — about double the amount it managed a year prior.

Its physically backed crypto ETPs (exchange-traded products), available on exchanges such as Euronext, Börse Xetra and Six Swiss Exchange are already a favorite of sophisticated and accredited investors in Western Europe, the spokesperson noted.

“By partnering with FlowBank we are targeting a different type of investors and addressing trading enthusiasts,” the representative added.

CoinShares CEO Jean-Marie Mognetti will join FlowBank’s board of directors to help guide its digital asset strategy and international development.

CoinShares executives told Blockworks in December that institutional investors continue considering products focused on bitcoin and ether, but its self-directed customers have become increasingly interested in alternative coins.

The firm in recent months has launched physically backed crypto ETPs focused on Cardano, Tezos and Polkadot, which are designed to share staking rewards with investors.

CoinShares partnered with Scalable Capital in December, allowing the Germany-based digital wealth manager and broker to offer its customers crypto ETPs alongside stocks and ETFs.

At around the same time, it acquired French crypto company Napoleon, which makes available trading and basket agents, aiming to support the construction of better medium- to long-term risk-adjusted performance. 

“There is more coming,” the CoinShares spokesperson said. “Simply put, our integrated strategy is underway.”

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