- August 2, 2023
- Posted by: [email protected]
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CoinShares, an European digital asset manager, saw a large gain in revenue during the second quarter of 2023, with a 33% increase over the same period the previous year. The surge in revenue was primarily driven by the success of their proprietary trading activities. As a prominent manager of Bitcoin, Ethereum, and various altcoin crypto exchange-traded products (ETPs) in Europe, CoinShares reported a total revenue of 20.3 million pounds ($25.9 million) in Q2 2023.
Breaking down the revenue sources, the firm witnessed a 25% decline in asset management fees, which amounted to 10.6 million pounds ($13.52 million). However, this decline was effectively offset by a substantial gain of 10 million pounds ($12.76 million) in capital markets operations, particularly trading activities. As a result, CoinShares achieved profits of 5.3 million pounds ($6.76 million) during the quarter, marking a significant turnaround from the loss of 0.6 million pounds ($0.77 million) experienced in Q2 2022.
Throughout the second quarter, CoinShares managed to maintain its total assets under management at a steady level of approximately 2.1 billion pounds ($2.68 billion). During this period, the company introduced a groundbreaking tool called “Ledger Lens,” developed in collaboration with an undisclosed accounting firm. The tool enables investors to verify the underlying assets supporting the group’s ETPs in real-time, enhancing transparency and confidence in their investments.
CoinShares CEO Jean-Marie Mognetti identified regulatory developments as a key factor influencing the market. Notably, he highlighted the United States Securities and Exchange Commission’s (SEC) legal actions against major players in the crypto space like Binance and Coinbase. Mognetti sees these regulatory interventions as potentially advantageous for traditional finance entities, as they may restrict access for regulated institutions, creating a level playing field for companies like CoinShares.
In addition to generating revenue from ETP management fees, CoinShares has actively engaged in decentralized finance (DeFi) activities, staking, and lending. In Q3 2023, the firm derived close to 9 million pounds ($11.48 million) from these ventures, a substantial increase from the 5.7 million pounds ($7.27 million) recorded in Q2 2022. However, the revenue from liquidity provisions experienced an 89% year-over-year drop, amounting to 0.2 million pounds ($0.26 million). This decline was attributed to significant outflows from their Bitcoin ETPs.
CoinShares’ Q2 2023 financial results demonstrate their continued success in the digital asset management space, driven by strong proprietary trading activities and a diversified approach towards decentralized finance. Despite challenges posed by regulatory developments and volatile market conditions, the firm’s performance has been robust, providing investors with confidence in their management strategies.
