European digital asset manager CoinShares’ revenue up 33% in Q2

Proprietary trading activities contributed heavily to the revenue increase.

CoinShares, a manager of Bitcoin (BTC), Ether (ETH) and various altcoin crypto exchange-traded products (ETPs) in Europe, reported total revenue of 20.3 million pounds ($25.9 million) in the second quarter of 2023, a 33% increase compared wit the prior year’s quarter.

According to the Aug. 1 announcement, the firm’s 25% year-over-year decline in asset management fees to 10.6 million pounds ($13.52 million) was offset by a 10 million pound ($12.76 million) gain in capital markets operations, such as trading. CoinShares’ profits for the quarter were 5.3 million pounds ($6.76 million), compared with a loss of 0.6 million pounds ($0.77 million) in Q2 2022.

The group’s total assets under management have remained steady at around 2.1 billion pounds ($2.68 billion). During the quarter, CoinShares implemented the “Ledger Lens” tool backed by an unnamed accounting firm allowing investors to verify the backing of the group’s ETPs in real time.

CoinShares CEO Jean-Marie Mognetti sees regulatory developments in the past quarter, such as the United States Securities and Exchange Commission’s (SEC’s) lawsuits against Binance and Coinbase, as potential positive developments for firms in traditional finance. The SEC’s actions may “dramatically alter the regulatory landscape, potentially limiting access to regulated institutions already accustomed to navigating complex legal and regulatory environments, such as traditional finance (TradFi) entities,“ he said.

Aside from collecting ETP management fees, the firm is also actively engaged in decentralized finance, staking and lending, having derived nearly 9 million pounds ($11.48 million) from such activities in Q3 2023 versus 5.7 million pounds ($7.27 million) in Q2 2022. Meanwhile, revenue from liquidity provisions fell 89% year-over-year to 0.2 million pounds ($0.26 million). The company attributes this to heavy outflow on its Bitcoin ETPs.

How did CoinShares perform in this last quarter? As our Q2 Earnings call is taking place, we are sharing some results with you.

– Revenue for Q2 2023: £10.7 million
– Gains and Other Income for Q2 2023: £9.7 million
– Total comprehensive income for Q2 2023: £5.3 million
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— CoinShares (@CoinSharesCo) August 1, 2023