CoinShares Reports Strong Revenue Growth in Q2 2023

The revenue increase was mainly driven by the firm’s proprietary trading activities. CoinShares, a Bitcoin and Ether manager, along with various altcoin crypto exchange-traded products (ETPs) in Europe, reported a total revenue of 20.3 million pounds ($25.9 million) in the second quarter of 2023, representing a significant 33% growth compared to the same quarter of the previous year.

The firm’s asset management fees experienced a decline of 25% year-over-year, amounting to 10.6 million pounds ($13.52 million). However, this decrease was offset by a gain of 10 million pounds ($12.76 million) from capital markets operations, particularly trading. As a result, CoinShares achieved profits of 5.3 million pounds ($6.76 million) in the quarter, a significant turnaround from the loss of 0.6 million pounds ($0.77 million) in Q2 2022.

CoinShares’ total assets under management remained stable at around 2.1 billion pounds ($2.68 billion). During the quarter, the company introduced the “Ledger Lens” tool, which allows investors to verify the backing of the group’s ETPs in real-time, with the support of an undisclosed accounting firm.

The CEO of CoinShares, Jean-Marie Mognetti, perceives recent regulatory developments, such as the United States Securities and Exchange Commission’s (SEC) lawsuits against Binance and Coinbase, as potentially beneficial for traditional finance firms. He believes that such actions could alter the regulatory landscape and potentially restrict access to regulated institutions that are already familiar with navigating complex legal and regulatory environments, such as traditional finance entities.

In addition to collecting ETP management fees, the firm is actively involved in decentralized finance, staking, and lending, which contributed nearly 9 million pounds ($11.48 million) in Q3 2023, a significant increase from 5.7 million pounds ($7.27 million) in Q2 2022. However, revenue from liquidity provisions declined by 89% year-over-year to 0.2 million pounds ($0.26 million) due to heavy outflows from its Bitcoin ETPs.

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