By
Godfrey Benjamin
April 20th, 2024
CoinShares maintains a cautious optimism going ahead amid a strong surge in the regulatory activity taking place in the crypto market.
Popular crypto investment firm CoinShares recently published its first quarter earnings results for the year 2023 marking a strong turnaround in the company profits. Of course, this comes amid the strong bounce-back taking place in the crypto sector this year.
CoinShares Q1 2023 Earnings Report
CoinShares called it a “return to profitability” after a tumultuous period last year in 2022 amid a strong crypto winter. In its report, CoinShares noted:
“In Q1 2023, as in 2022, the financial and crypto industries faced a challenging and complex landscape. Against this backdrop CoinShares demonstrated a powerful resilience. During the quarter we generated revenue and gains of £15.3 million and successfully returned to profitability, with Adjusted EBITDA of £8.5 million. This resulted in an Adjusted EBITDA margin of 55%.”
Furthermore, the report cites the collapse of crypto-friendly banks such as Signature Bank and Silvergate Capital, as well as the regulatory scrutiny that followed after the dramatic collapse of the FTX exchange last November 2022.
This followed strong regulatory action and government oversight that have dampened the market sentiment to a great extent. However, despite all the negative macro indicators, the broader crypto market has done well.
Bitcoin (BTC) continued to show major strength during the banking crisis as investors started perceiving it as a safe haven. At the current price of $27,000, BTC is still trading at more than 65% gains year-to-date.
Cautious Optimism Going Ahead
Crypto investment firm CoinShares noted that it maintains a cautious optimism for the crypto market going ahead. It noted:
“We welcome this additional regulatory activity but hope it does not devolve into a witch hunt or become a consequence of crypto politicisation ahead of the U.S. elections, as some commentators have speculated.”
The earnings report from CoinShares comes just a day after the crypto investment firm released its “Digital Asset Fund Flows Report”. Last week, the total outflows in the Digital Assets Investment products totaled $54 million.
“Bitcoin funds witnessed outflows of $38 million. Over the past four weeks, total BTC outflows amounted to $160 million, accounting for 80% of all outflows. Furthermore, when combining the outflows from short positions on Bitcoin, the total value of outflows related to this asset alone reached $201 million. These numbers strongly highlight that recent investor activity has been overwhelmingly focused on Bitcoin,” notes the CoinShares report.