Crypto Analytics

CoinShares Q1 Earnings Slide, Retail Remains Focus, Executives Say

  • After reporting record earnings in the fourth quarter of 2021, CoinShares has seen a significant pullback in 2022
  • An ongoing sell-off in digital assets combined with rising costs led the company to report a 45% year-over-year decline in its EBITDA

Digital asset manager CoinShares is the latest public company to be hit by broader risk appetite in markets, its latest earnings report shows.

After a record quarter in which the wealth manager reported its highest quarterly earnings and assets under management, the first quarter of 2022 was a notable decline.

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 US dollars), down 45% from the previous year.

The slump is primarily due to an overall decline in capital market performance and an increase in the cost base, largely due to the discontinuation and launch of new investment products, CoinShares chief financial officer Richard Nash said on Tuesday’s conference call.

“Of course, as might be expected, group performance was impacted by the market conditions that everyone is experiencing in the first quarter of 2022,” Nash said.

Total earnings, which take into account the change in value of the company’s digital asset holdings, fell to £20.2m compared to £32.1m a year earlier. Assets under management for its ETP suite were £3.07 billion in the first quarter, down slightly from the fourth quarter of 2021.

Across CoinShares’ product range, the company generated combined management fees of £17.2 million, which is relatively flat from 2021 levels. The company remains focused on diversifying its revenue streams away from management fees while expanding its product range and offering fee-free options, Nash said.

In the first quarter, the wealth manager launched the first-ever staked ETPs (exchange-traded products) that do not incur management fees. The products allow investors to take a portion of staking rewards each day, which has paid off, Nash said, as CoinShares ETPs saw the largest net inflows from alternative coins in the first quarter.

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

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The CoinShares Q1 Earnings Slide, Retail Remains Focus, Execs Say post is not financial advice.

Source: Crypto News Austria

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