European digital asset investment firm CoinShares reported financial results for the second quarter of 2024, showcasing significant growth in asset management revenue and total comprehensive income. However, the collapse of FlowBank negatively impacted the company’s principal investments, consuming the majority of total revenues.
Points
- CoinShares posted strong asset management revenue and comprehensive income.
- The collapse of FlowBank significantly impacted principal investments.
- The company’s asset management business continues to lead in Europe.
- CoinShares completed the sale of its FTX claim, resulting in a special dividend.
CoinShares, a leading European digital asset investment firm, reported its financial results for the second quarter of 2024 today, building on the momentum from Q1 and announcing a special dividend following the successful recovery of its FTX claim. However, the report indicates that FlowBank’s collapse negatively impacted the company’s principal investments, ultimately consuming the vast majority of total revenues.
FlowBank Weighs on CoinShares’ Q2 2024 Results
The company posted asset management revenue of £22.5 million for Q2 2024, more than doubling from £10.7 million in the same period last year. Total comprehensive income surged to £25.8 million, up from £5.3 million in Q2 2023. Adjusted EBITDA also saw significant growth, reaching £26.6 million compared to £11.4 million in the prior-year quarter.
The total assets under management （AUM） of CoinShares at the end of June amounted to £4.19 billion, down from the record level of £4.8 billion reported in the previous quarter. However, these are still record values, exceeding the previous records from the end of 2021.
“Our consistent performance in Q2 demonstrates that our Q1 was not an outlier, but the result of continued efforts. This underscores the benefits from our restructuring and streamlining initiatives over the past two years,” Jean-Marie Mognetti, CEO of CoinShares, commented on the results.
However, the company reported a material write-down in its “principal investments” portfolio due to the bankruptcy of Swiss digital bank FlowBank SA, which it has elected to impair fully.
CoinShares and FlowBank
The company’s total revenue consists of asset management activities, profits from cryptocurrency investments, and the aforementioned principal investments. This last category generated a loss of nearly £25 million, consuming all the revenue provided by AUM.
In mid-June, the company was informed that “the Swiss Financial Market Supervisory Authority had opened bankruptcy proceedings against FlowBank.” A few days later, the company decided “to fully impair its investment in FlowBank,” resulting in an impairment charge of over £21.8 million.
The company’s asset management business consolidated its leadership position in Europe, with its European Physical ETP platform recording its third-best quarter in terms of net flows. In the United States, CoinShares focused on product development and marketing initiatives for its recently acquired Valkyrie business.
FTX Claims
On a positive note, CoinShares completed the sale of its FTX claim at the end of June, achieving a recovery rate of 116% net of broker fees, translating to a return of £28.7 million. Following this recovery, the Board of Directors has decided to pay a special dividend to shareholders amounting to £24.3 million.
“CoinShares’ balanced strategy aims to establish it as a unique and attractive long-term investment in the crypto listed market, while strengthening its position as a leader in digital assets,” added Mognetti. “The resolution of the FTX situation has been highly favorable for CoinShares.”
The value of the special dividend represents 86% of the total funds received in respect of the sale. “It is to be distributed with the forthcoming regular dividend payment scheduled for 3 October 2024,” the report concluded.
解説
- CoinShares’ robust Q2 performance highlights the company’s strong position in the digital asset market.
- The collapse of FlowBank underscores the risks associated with principal investments.
- The successful recovery of the FTX claim and subsequent special dividend is a significant positive development.
- CoinShares’ focus on product development and marketing in the US market indicates strategic growth initiatives.
- Investors should consider both the risks and opportunities presented by CoinShares’ diverse revenue streams.