CoinShares, a leading digital asset manager in Europe specializing in Bitcoin (BTC), Ether (ETH), and various altcoin crypto exchange-traded products (ETPs), experienced significant growth in revenue during Q2 2023. The company reported total revenue of £20.3 million ($25.9 million), marking a notable 33% increase compared to the same quarter in the previous year.
The surge in revenue was primarily attributed to CoinShares’ proprietary trading activities, which contributed substantially to the firm’s financial success. While asset management fees witnessed a decline of 25% year-over-year, amounting to £10.6 million ($13.52 million), capital markets operations, including trading, generated a gain of £10 million ($12.76 million). As a result, CoinShares achieved profits of £5.3 million ($6.76 million) for the quarter, a stark contrast to the £0.6 million ($0.77 million) loss incurred in Q2 2022.
CoinShares maintained its total assets under management at approximately £2.1 billion ($2.68 billion) throughout the quarter. Notably, the company introduced the “Ledger Lens” tool, developed in collaboration with an undisclosed accounting firm. This tool enables investors to verify the real-time backing of CoinShares’ ETPs, enhancing transparency and trust within the market.
CEO Jean-Marie Magnetti of CoinShares is optimistic about regulatory developments during the past quarter. He views recent actions by regulatory authorities, such as the U.S. Securities and Exchange Commission’s lawsuits against Binance and Coinbase, as potential positive developments for traditional finance entities (TradFi). These actions could reshape the regulatory landscape and potentially limit access to regulated institutions already well-versed in navigating complex legal and regulatory frameworks.
In addition to ETP management fees, CoinShares actively participates in decentralized finance, staking, and lending. The company witnessed a substantial increase in revenue from these activities, amounting to £9 million ($11.48 million) in Q3 2023 compared to £5.7 million ($7.27 million) in Q2 2022. However, revenue from liquidity provisions experienced an 89% year-over-year decline to £0.2 million ($0.26 million), primarily due to significant outflows related to its Bitcoin ETPs.
CoinShares’ strong performance in Q2 2023 demonstrates the company’s ability to navigate dynamic market conditions and leverage proprietary trading activities to drive revenue growth. Despite challenges in liquidity provisions, the firm remains optimistic about the future of digital asset management while actively engaging in various sectors within the blockchain ecosystem.