WisdomTree Triples Down on Future Blockchain Focus

The $75 billion asset manager’s digital assets consumer app is on track for national rollout in Q1 of 2023

article-image

Source: Shutterstock

share

key takeaways

  • “It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we’re pursuing,” WisdomTree COO says
  • The firm gained approval last month for a fund that digitizes its share ownership record on the blockchain, and has filed for nine more

WisdomTree executives went as far as to say blockchain-enabled digital wrappers are the future of asset management — while the ETF-focused fund group gets set to roll out its digital assets consumer app in the first quarter of 2023.

The company’s leaders on Friday doubled down on its shift to a focus on digital assets during WisdomTree’s earnings call, reiterating its goal to bring fixed income, equities and commodities into the digital world through blockchain-enabled funds and tokenized exposures.

“Crypto’s interesting, but the real opportunity is blockchain-enabled finance,” Chief Operating Officer Jarrett Lilien said during the call. “It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we’re pursuing.”

CEO Jonathan Steinberg said that in addition to dropping “Investments” from its name, the company would change its ticker from WETF to WT. 

Though the company has 78 ETFs trading in the US with roughly $52 billion in assets under management, according to ETF.com, the CEO said the adjustments were “a nod toward our natural evolution and history of innovation” as the company looks to expand.

The company’s assets under management dropped to about $71 billion in the third quarter — down 4.6% from the second quarter — due to market depreciation. It has since rebounded to nearly $75 billion, in part due to $1.8 billion in October net inflows. 

Its cryptoassets under management rose slightly from $151 million, as of June 30, to $163 million at the end of the third quarter. Net flows in the segment, which totaled $41 million in 2022, as of Sept. 30, were flat last quarter.

The company posted adjusted earnings per share of $0.06, which was in line with estimates. WisdomTree’s stock price, which is down about 16% year to date, was down 1.5% on the day at 12:30 pm ET. 

Blockchain-focused product development

Executives said during the call that the company’s blockchain-native financial services mobile app, WisdomTree Prime, is in beta testing and is on track for a national rollout by the end of the first quarter of 2023.

WisdomTree CEO Jonathan Steinberg said the company has so far spent roughly $20 million on its tokenization and WisdomTree Prime efforts. The company’s leaders declined to comment on the app’s number of beta users or transaction volumes so far.

The firm also gained SEC approval to launch its Short-Term Treasury Digital Fund last month — an offering that digitizes its fund share ownership record on the Ethereum or Stellar blockchains. Executives have said the fund is a first step toward bringing traditional financial assets into the digital ecosystem and allowing blockchain rails to improve investor experience, such as through near-instant settlement finality.

WisdomTree has filed for nine additional funds to be part of a blockchain-enabled fund suite that includes fixed income and equity strategies, executives revealed. 

Such offerings are expected to only be available via WisdomTree Prime initially, according to Will Peck, the firm’s head of digital assets. 

Journey to a US spot bitcoin ETF

WisdomTree’s proposed US spot bitcoin ETF was rejected by the SEC last month, a familiar outcome for all asset managers who have sought to bring such a product to market. 

Grayscale Investments is moving forward with suing the SEC for denying the company’s proposal to convert its Bitcoin Trust (GBTC) to an ETF. 

Peck said Friday that the firm has no plans to join Grayscale’s lawsuit, adding WisdomTree would instead look to “work productively” with the SEC. 

“We know that regulatory concerns take time to address, and appreciate the due diligence in doing so,” Peck previously told Blockworks. “We acknowledge that this is a slow-moving process, and we aren’t letting that stop us from innovating in other ways in the meantime.” 

The company offers crypto ETPs, including a spot bitcoin product, in Europe.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Also in the tokenized fund space, Franklin Templeton launches on Base and Securitize hits $1 billion in tokenized RWA onchain

article-image

It turns out that bitcoin never actually hit an all-time high in March. Thanks a lot, inflation.

article-image

Spire, Citrea and Nillion also announced raises this week

article-image

The latest recipient of an SEC Wells notice is a Web3 gaming company

article-image

Thursday’s selloff was led by tech stocks, triggered by disappointing outlooks from giants Meta and Microsoft

article-image

Historically, positive returns have been a bit more of a toss-up during the year’s 11th month