CoinShares, a leading crypto asset manager, reported impressive post-tax profits of nearly £404 million ($513.1 million) for the second quarter, a dramatic increase from £10 million in the same period last year.
The solid performance comes despite a $481.4 million loss on the fair value of digital assets due to market downturns, with Bitcoin, the largest cryptocurrency, dropping by 12% during Q2—its largest decline since Q4 2022.
After accounting for this depreciation, CoinShares’ comprehensive income for Q2 was $32.6 million, a massive jump from $6.3 million in Q2 2023. The firm’s assets under management nearly doubled, rising from $2.7 billion to $5.3 billion.
Asset management fees also more than doubled to $28.45 million, buyoed by acquiring the exchange-traded fund (ETF) unit of Nashville-based Valkyrie. This acquisition expanded CoinShares’ ETP business into the U.S. market.
CoinShares is a European investment company specializing in digital assets, that delivers a broad range of financial services across investment management, trading, and securities.
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Revenue and FTX claim boost
CoinShares reported a 110% increase in revenue for Q2, reaching £22.5 million ($28.5 million), up from £10.7 million ($13.5 million) in the previous year. A key contributor to this growth was the sale of CoinShares’ claim on FTX bankruptcy proceedings, which yielded a 116% return, netting £31.32 million ($39.78 million). Initially, the claim was valued at £26.6 million ($33.78 million) at the time of FTX’s collapse.
Conversely, CoinShares wrote down its investment in FlowBank SA after the Swiss Financial Market Supervisory Authority (FINMA) declared it bankrupt, resulting in a £21.8 million ($27.6 million) loss. CoinShares decided to fully impair this holding, similar to its treatment of FTX assets in 2022.
CoinShares’ adjusted EBITDA for Q2 was £26.6 million ($33.7 million), bringing the year-to-date total to £60.8 million ($77.2 million), up 133% year-over-year and a 235% growth year-to-date.
The company also reported one of its best quarters for net flows since 2021, with $67 million in inflows through its European physical exchange-traded products (ETPs). These ETPs offer exposure to cryptocurrencies backed by physical assets like Bitcoin, Ether, Litecoin, and staked coins such as Solana. The CoinShares Physical Bitcoin ETP alone captured $55 million in inflows, the highest among all Bitcoin ETPs in Europe for Q2.
However, CoinShares’ Physical Staked Ethereum ETP saw $15 million in outflows, a trend observed across most ETP issuers in Europe. The recently acquired spot Bitcoin ETP from Valkyrie Funds raised an additional $44 million in Q2, aligning with the overall industry slowdown.
Headquartered in Jersey, where it is by the Jersey Financial Services Commission, CoinShares has offices in France, Sweden, Switzerland, the UK, and the US. The company is also regulated by the Autorité des marchés financiers in France; and in the US by the Securities and Exchange Commission, National Futures Association, and Financial Industry Regulatory Authority.
