Cryptocurrency investment group CoinShares recently released its earnings report for the first quarter of 2023, saying it "returned to profitability."
Highlights of the report include revenue of $11.73 million (down from $22.46 million in Q1 2022), total consolidated revenue of $3.62 million (down from $25.83 million in Q1 2022) and adjusted interest, tax, depreciation and Earnings before amortization (EB ITDA) came in at $10.61 million (down from $25.83 million in Q1 2022). Overall, CoinShares will post an operating loss of $25.21 million in 2022, in stark contrast to the $126.54 million operating profit the company reported in 2021.
According to the report, this comes after a turboent period for the company and the cryptocurrency industry as a whole: “As in 2022, Q1 2023 presents a challenging and complex landscape for the financial and crypto industries. Against this backdrop, CoinShares has shown great resilience. We generated £15.3 million in revenue and gains and successfully returned to profitability with an adjusted EBITDA of £8.5m. This resulted in an adjusted EBITDA margin of 55%.”
The report cites the recent collapse of “crypto-friendly banks such as Silvergate and Signature” and regulatory scrutiny surrounding FTX’s “precipitous decline” as moderating factors for gains, suggesting that profits may have been diminished by the looming specter of government reg ulation. CoinShares appeared Cautiously optimistic about the future, saying “we welcome this additional regulatory activity but hope it will not turn into a witch hunt or the result of the politicization of cryptocurrencies ahead of the US election, as some commentators have speculated.” The earnings report comes on the heels of CoinShares' “Digital Asset Flows Report,” which, as Cointelegraph reported, showed outflows from digital asset investment products totaled $54 million this week, meaning the majority of funds moved away from exchanges to the wallet.
According to CoinShares, the recent trend of outflows can be at least partially blamed on consumer and industry speculation related to US federal rate hikes. As mentioned in a previous Cointelegraph report, this speculation may have been a contributing factor to Bitcoin's recent volatile city.
