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CoinShares Q1 2022 Earnings Take Hit amid Crypto Market Downturn

UTC by Bhushan Akolkar · 2 min read
CoinShares Q1 2022 Earnings Take Hit amid Crypto Market Downturn
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Amid the crypto market slump, the company took a hit in assets under management (AUM) while its total revenue tanked by 42%.

On Tuesday, May 3, Europe-based crypto asset manager CoinShares reported its first-quarter (Q1) earnings for the year 2022. The company reported a 42% drop in its revenue year-over-year.

For the first quarter, CoinShares’ total revenue stood at £27.96 million ($35 million). This was 42% lower when compared to the previous year’s revenue of £39.91 million ($50 million). At the same time, the company adjusted earnings i.e. EBIDTA dropped nearly 80% to £18.7 million ($23 million), down from £34.2 million a year ago.

As of March 31st, 2022, the assets under management (AUM) for CoinShares came down to £3.07 billion. There was a 10% drop year-over-year for the same.

It is clear that CoinShares has been facing the heat of the market correction in 2022. In the first four months of 2022 so far, the broader cryptocurrency market has eroded 20% i.e. $500 billion of investors’ wealth.

Bitcoin’s (BTC) price has tanked nearly 40% since the beginning of the year and 80% from its all-time high in November 2021. Speaking of the development, Jean-Marie Mognetti, Chief Executive Officer of CoinShares commented:

“We delivered resilient EBITDA of £18.7 million, all while making considerable steps to advance our long-term strategy. This includes work towards our imminent uplisting to Stockholm’s main market, significantly growing our headcount, including a new Group Head of Marketing and a dedicated team to support the Group’s enlarged footprint, and integrating our consumer platform, Napoleon. We are continuing to invest in our long-term future, and the Group is well positioned to navigate the shifting global regulatory landscape for digital assets in 2022.”

DeFi Comes to the Rescue

The slump in the broader cryptocurrency market certainly dampened the earnings revenue for CoinShares. But the company said that there were significant opportunities from the group’s delta neutral trading strategies.

Besides, CoinShares also noted that the main driver of its performance in Q1 2022 was DeFi-related staking and lending activities. The company had deployed a total of $313 million across a range of DeFi protocols including TrueFi, Anchor Protocol, and Maple Finance. During the same quarter last year, DeFi had brought zero income for CoinShares. Thus, it emerged as a new revenue-generating unit for CoinShares.

CoinShares CFO, Richard Nash also noted that exploring new business areas and increased areas were some of the reasons behind the volatile performance in the first quarter.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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