CoinShares maintains cautious optimism going forward amid the strong upsurge in regulatory activity happening in the cryptocurrency market.
Popular crypto investment firm CoinShares recently published its Q1 2023 earnings results marking a strong turnaround in the company’s earnings. Of course, this comes amid the strong recovery that’s been happening in the crypto sector this year.
CoinShares Earnings Report for the first quarter of 2023
CoinShares described it as a “return to profitability” after a turbulent period last year in 2022 amid a strong cryptocurrency winter. In its report, CoinShares male:
“In the first quarter of 2023, as in 2022, the financial and crypto industries faced a challenging and complex landscape. Against this background, CoinShares showed strong resilience. During the quarter, we reported revenue and gains of £15.3 million and successfully returned to profitability, adjusted for earnings. EBITDA of £8.5m. This resulted in an adjusted EBITDA margin of 55%.”
Moreover, the report points to the collapse of crypto-friendly banks such as Signature Bank and Silvergate Capital, as well as the regulatory scrutiny that followed the dramatic collapse of the FTX exchange last November 2022.
This came on the heels of strong regulatory action and government oversight which dampened market sentiment considerably. However, despite all the negative macro indicators, the broader cryptocurrency market has been doing quite well.
Bitcoin (BTC) continued to show significant strength during the banking crisis as investors began to view it as a safe haven. At the current price of $27,000, BTC is still trading more than 65% of the year-to-date gains.
Cautious optimism goes ahead
Crypto investment firm CoinShares indicated that it maintains cautious optimism about the continuation of the cryptocurrency market. I noticed:
“We welcome this additional regulatory activity but hope it does not turn into a witch hunt or become a consequence of cryptocurrency politicization ahead of the US elections, as some commentators have predicted.”
The earnings report from CoinShares comes just a day after the crypto investment firm released its “Digital Asset Funds Flows Report.” Last week, outflows in digital asset investment products totaled $54 million.
“Bitcoin funds saw outflows of $38 million. Over the past four weeks, BTC outflows totaled $160 million, accounting for 80% of all outflows. Moreover, when combined with outflows from short positions on Bitcoin, The total value of outflows related to this asset alone was $201 million. These numbers highlight that recent investor activity has been heavily focused on Bitcoin,” notes the CoinShares report.
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Bhushan is a financial technology enthusiast with a good knack for understanding financial markets. His interest in economics and finance has turned his attention towards the new emerging Blockchain technology and Cryptocurrency markets. He is persistent in the learning process and keeps himself motivated by sharing the knowledge gained. In his spare time he reads fantasy and thriller novels and occasionally explores his culinary skills.