Det ledande europeiska investeringsföretaget som specialiserar sig på digitala tillgångar
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An eventful quarter has brought with it numerous positive developments within our ever-expanding Asset Management business, a successful sale of our FTX claim within CapitalMarkets, and a material impairment within our Principal Investments portfolio.
2024 Q2
An eventful quarter has brought with it numerous positive developments within our ever-expanding Asset Management business, a successful sale of our FTX claim within Capital Markets, and a material impairment within our Principal Investments portfolio. These events, in conjunction with performance from the underlying business, have resulted in Adjusted EBITDA of £26.6 million for Q2 (year-to-date £60.8 million), representing an increase of 133% when compared to Q2 2023 (year-to-date increase vs 2023 of 235%).
As is customary, let me start by sharing the view from our desk on the broader digital asset market landscape before delving into the performance of our various business lines this quarter. The digital asset industry has continued to demonstrate remarkable resilience and evolution, with several key developments shaping the future trajectory of the market.
On the Spot Bitcoin ETP front, we witnessed a strong persistence in investor interest during the quarter. Q2 inflows for our industry amounted alone to $2.75 billion, and as of the beginning of July, the cumulative total net inflows year to date had reached $16.84 billion. This further underscores the growing appetite for Bitcoin exposure through regulated investment vehicles.
Building on this momentum, we have seen a notable push towards the approval of Spot Ethereum ETPs in the United States, driven by the SEC’s sudden turnaround on its stance towards Ethereum and potential other cryptocurrencies. The American regulator’s shift in regulatory stance has fuelled optimism that the approval of spot ETPs for other blockchain assets may soon follow. This change in the regulatory landscape could unlock the door for a wider range of crypto-based investment vehicles to be made available to investors in the coming years and months.
Interestingly, Bitcoin prices have surged in recent days following predictions of a Trump election victory after a failed assassination attempt. This bullish trend can be attributed to two key factors. First, Trump’s policy stance is widely perceived as favorable for the cryptocurrency industry, as it is expected to promote more crypto-friendly regulations. Second, his proposed lower interest rates, tax rates, and tariffs are anticipated to have an inflationary effect, which has historically been beneficial for Bitcoin. Combined with growing global uncertainty around the geopolitical role of the U.S. and the future of the U.S. dollar as a reserve currency, the stage appears set for a potential acceleration in Bitcoin’s price. Some are now talking in the US about a strategic reserve function for Bitcoin. These market dynamics underscore Bitcoin’s status as a macro-asset, one that is increasingly correlated with broader economic and political developments.
On the global regulatory front, significant strides have been made in various regions. Hong Kong approved its first spot Bitcoin and Ethereum ETFs, marking a crucial step in integrating cryptocurrencies into the Asian financial landscape. In Europe, the implementation of MiCA rules progressed, while the London Stock Exchange listed Ethereum and Bitcoin ETNs to provide institutional investors only with regulated access to these digital assets. In the United States, the House passed the FIT Act to provide much-needed clarity on crypto market regulations. These advancements across different jurisdictions are expected to bolster investor confidence and market stability.
All of these developments continue to validate CoinShares’ initial investment thesis about the institutionalization of digital assets. Alongside these industry-wide developments, at the end of June we shared significant news for CoinShares since we announced the successful completion of the sale of our FTX claim, achieving a recovery rate of 116% net of broker fees. This translates to a return of £28.8 million on a £26.6 million claim. We made the conscious decision in 2022 and 2023 to wait patiently and not rush to sell our FTX claim quickly. This approach has paid off, creating an opportunity to provide increased returns to our shareholders.
Asset Management
For CoinShares’ asset management business, the quieter quarter - relative to the first quarter with the SEC approval of Spot Bitcoin ETPs - allowed us to consolidate our leadership position in Europe. We focused on exploring new product initiatives, engaging with our investors across Europe, and continuing our dialogue with regulators to expand our presence in new markets. Our European Physical ETP platform recorded its third-best quarter in terms of net flows since its inception in 2021, with $67 million of inflows. The CoinShares Physical Bitcoin ETP captured $55 million of inflows, the highest among all Bitcoin ETPs in Europe in Q2, and we think these strong results are the first confirmation that the fee reduction we implemented in Q1, combined with the right product structure meet the requirements of clients. Conversely, our CoinShares Physical Staked Ethereum ETP experienced $15 million of outflows, a trend seen across most ETP issuers in Europe. Investors in our European legacy platform, CoinShares XBT Provider, continued to realize their gains, resulting in $131 million of outflows in Q2, although this was significantly lower than the $238 million of outflows observed in Q1. We anticipate net outflows from CoinShares XBT Provider to stabilize due to market trading sideways.
In the United States, with most of the integration phase of the recently acquired Valkyrie business now behind us, Q2 was about intensifying our product development efforts, working on bringing new, innovative products to market, as well as focusing on building our marketing and distribution strategy to promote our brand and US products. BRRR, our spot bitcoin ETP, raised an additional $44 million in Q2. Although this is lower than the inflows experienced in Q1, it aligns with the overall slowdown observed across the whole industry. We believe BRRR remains competitive in both fees and liquidity and is well-positioned to maintain, if not increase, its market share in the coming quarters. WGMI, our pure-play Bitcoin mining ETF listed on Nasdaq, continued to attract $14 million in net new inflows in Q2.
Capital Markets & Hedge Fund Solutions
CoinShares’ Capital Markets division aptly captured the basis trading and market-making opportunities presented in the second quarter. While the market was non-trending over the period, it featured two significant but ultimately offsetting market-moving events. To the downside, the Iran-Israel conflict weighed on sentiment, countered by a sharp recovery fuelled by the anticipation of spot Ethereum ETP listings in the U.S.
The Hedge Fund Solutions division’s short volatility strategies performed within risk tolerances but did not outperform the underlying assets in the quarter. However, with macro event risk declining and the forthcoming spot Ethereum ETPs, the firm remains confident about the long-term opportunities for our BIS and EIS funds.
Importantly, the CoinShares Engineering and Quant team delivered to production a significant new trade execution and risk platform, MATRIX. This advanced platform, equipped with sophisticated trading algorithms and enhanced risk management capabilities, will foster the next phase of growth and sophistication for our Capital Markets and Hedge Fund Solutions divisions.
Principal Investments
Unfortunately, the quarter saw a material write-down within our Principal Investment portfolio in respect of FlowBank Holdings SA. As announced early June, actions taken by FINMA have resulted in the Swiss digital bank being placed into bankruptcy. For the time being, as we did with our FTX assets back in 2022, we have elected to impair this holding in full. The remaining key investments within the portfolio (having successfully disposed of our holding in 3iQ during Q1 and realizing a gain of approximately £2.3 million) now comprise Komainu Holdings and WAO Holdings. The former has been a long-standing holding for the Group and an important commercial partner for us since its launch, while the latter represents our holding following the successful merger of Choice (Kingdom Trust) and WAO holdings completed at the end of 2023. This merger has already resulted in a cash distribution to the Group, but we look forward to analyzing the performance of the entity represented by our residual holding as we move towards the end of the year given performance to date has been profitable.
Special Dividend
At the beginning of this year, we announced that the Board of Directors had voted in favor of amending the Group’s dividend policy to allow for the commencement of dividend payments to our shareholders. This initiative was a clear demonstration of CoinShares’ strategic approach, whereby we have successfully balanced growth, facilitated strategic acquisitions, and achieved remarkable profitability - all of which now enable us to distribute dividends.
In light of the recent sale of our FTX claim mentioned above, the Board of Directors has decided to distribute a special dividend. We believe that in the current positive interest rate environment, and with our stock price still below its pre-FTX levels, it is necessary to recognize the trust and loyalty our shareholders have placed in us.
As the CEO of this company, I want to reassure our shareholders that our commitment to fueling innovation and expansion remains steadfast. The recent acquisition of Valkyrie’s ETP business is a testament to this. The distribution of dividends does not prevent us from continuing to innovate and grow. We have a solid balance sheet that enables us to strike the right balance between rewarding our shareholders and investing in the future of CoinShares.
Investor Relations
In Q2, we began to see the tangible results of our strategic Investor Relations efforts that commenced last year. This was evidenced by the coverage of CoinShares stock initiated by reputable Nordics firms like ABG Sundall Collier and Redeye, highlighting a potential promising future outlook for the company in their analysis.
To further enhance our communication with the investment community, we launched a completely new Investor Relations website. This platform provides investors with a clear and comprehensive description of our company, our unique value proposition, and detailed financial results.
These initiatives underscore our commitment to transparency and proactive engagement with our shareholders, especially in the Swedish market. By improving access to information and strengthening our Investor Relations, we aim to foster a deeper understanding of CoinShares’ position, performance, and growth potential within the digital asset industry.
As we close our 13th quarter as a listed company, I am hopeful that this could be a very successful yearfor the Group, demonstrating our potential to drive growth and deliver solid business results. Over time, we have evolved into a stronger, more focused, and continuously growing company.
An eventful quarter has brought with it numerous positive developments within our ever-expanding Asset Management business, a successful sale of our FTX claim within CapitalMarkets, and a material impairment within our Principal Investments portfolio.
2024 Q2
An eventful quarter has brought with it numerous positive developments within our ever-expanding Asset Management business, a successful sale of our FTX claim within Capital Markets, and a material impairment within our Principal Investments portfolio. These events, in conjunction with performance from the underlying business, have resulted in Adjusted EBITDA of £26.6 million for Q2 (year-to-date £60.8 million), representing an increase of 133% when compared to Q2 2023 (year-to-date increase vs 2023 of 235%).
As is customary, let me start by sharing the view from our desk on the broader digital asset market landscape before delving into the performance of our various business lines this quarter. The digital asset industry has continued to demonstrate remarkable resilience and evolution, with several key developments shaping the future trajectory of the market.
On the Spot Bitcoin ETP front, we witnessed a strong persistence in investor interest during the quarter. Q2 inflows for our industry amounted alone to $2.75 billion, and as of the beginning of July, the cumulative total net inflows year to date had reached $16.84 billion. This further underscores the growing appetite for Bitcoin exposure through regulated investment vehicles.
Building on this momentum, we have seen a notable push towards the approval of Spot Ethereum ETPs in the United States, driven by the SEC’s sudden turnaround on its stance towards Ethereum and potential other cryptocurrencies. The American regulator’s shift in regulatory stance has fuelled optimism that the approval of spot ETPs for other blockchain assets may soon follow. This change in the regulatory landscape could unlock the door for a wider range of crypto-based investment vehicles to be made available to investors in the coming years and months.
Interestingly, Bitcoin prices have surged in recent days following predictions of a Trump election victory after a failed assassination attempt. This bullish trend can be attributed to two key factors. First, Trump’s policy stance is widely perceived as favorable for the cryptocurrency industry, as it is expected to promote more crypto-friendly regulations. Second, his proposed lower interest rates, tax rates, and tariffs are anticipated to have an inflationary effect, which has historically been beneficial for Bitcoin. Combined with growing global uncertainty around the geopolitical role of the U.S. and the future of the U.S. dollar as a reserve currency, the stage appears set for a potential acceleration in Bitcoin’s price. Some are now talking in the US about a strategic reserve function for Bitcoin. These market dynamics underscore Bitcoin’s status as a macro-asset, one that is increasingly correlated with broader economic and political developments.
On the global regulatory front, significant strides have been made in various regions. Hong Kong approved its first spot Bitcoin and Ethereum ETFs, marking a crucial step in integrating cryptocurrencies into the Asian financial landscape. In Europe, the implementation of MiCA rules progressed, while the London Stock Exchange listed Ethereum and Bitcoin ETNs to provide institutional investors only with regulated access to these digital assets. In the United States, the House passed the FIT Act to provide much-needed clarity on crypto market regulations. These advancements across different jurisdictions are expected to bolster investor confidence and market stability.
All of these developments continue to validate CoinShares’ initial investment thesis about the institutionalization of digital assets. Alongside these industry-wide developments, at the end of June we shared significant news for CoinShares since we announced the successful completion of the sale of our FTX claim, achieving a recovery rate of 116% net of broker fees. This translates to a return of £28.8 million on a £26.6 million claim. We made the conscious decision in 2022 and 2023 to wait patiently and not rush to sell our FTX claim quickly. This approach has paid off, creating an opportunity to provide increased returns to our shareholders.
Asset Management
For CoinShares’ asset management business, the quieter quarter - relative to the first quarter with the SEC approval of Spot Bitcoin ETPs - allowed us to consolidate our leadership position in Europe. We focused on exploring new product initiatives, engaging with our investors across Europe, and continuing our dialogue with regulators to expand our presence in new markets. Our European Physical ETP platform recorded its third-best quarter in terms of net flows since its inception in 2021, with $67 million of inflows. The CoinShares Physical Bitcoin ETP captured $55 million of inflows, the highest among all Bitcoin ETPs in Europe in Q2, and we think these strong results are the first confirmation that the fee reduction we implemented in Q1, combined with the right product structure meet the requirements of clients. Conversely, our CoinShares Physical Staked Ethereum ETP experienced $15 million of outflows, a trend seen across most ETP issuers in Europe. Investors in our European legacy platform, CoinShares XBT Provider, continued to realize their gains, resulting in $131 million of outflows in Q2, although this was significantly lower than the $238 million of outflows observed in Q1. We anticipate net outflows from CoinShares XBT Provider to stabilize due to market trading sideways.
In the United States, with most of the integration phase of the recently acquired Valkyrie business now behind us, Q2 was about intensifying our product development efforts, working on bringing new, innovative products to market, as well as focusing on building our marketing and distribution strategy to promote our brand and US products. BRRR, our spot bitcoin ETP, raised an additional $44 million in Q2. Although this is lower than the inflows experienced in Q1, it aligns with the overall slowdown observed across the whole industry. We believe BRRR remains competitive in both fees and liquidity and is well-positioned to maintain, if not increase, its market share in the coming quarters. WGMI, our pure-play Bitcoin mining ETF listed on Nasdaq, continued to attract $14 million in net new inflows in Q2.
Capital Markets & Hedge Fund Solutions
CoinShares’ Capital Markets division aptly captured the basis trading and market-making opportunities presented in the second quarter. While the market was non-trending over the period, it featured two significant but ultimately offsetting market-moving events. To the downside, the Iran-Israel conflict weighed on sentiment, countered by a sharp recovery fuelled by the anticipation of spot Ethereum ETP listings in the U.S.
The Hedge Fund Solutions division’s short volatility strategies performed within risk tolerances but did not outperform the underlying assets in the quarter. However, with macro event risk declining and the forthcoming spot Ethereum ETPs, the firm remains confident about the long-term opportunities for our BIS and EIS funds.
Importantly, the CoinShares Engineering and Quant team delivered to production a significant new trade execution and risk platform, MATRIX. This advanced platform, equipped with sophisticated trading algorithms and enhanced risk management capabilities, will foster the next phase of growth and sophistication for our Capital Markets and Hedge Fund Solutions divisions.
Principal Investments
Unfortunately, the quarter saw a material write-down within our Principal Investment portfolio in respect of FlowBank Holdings SA. As announced early June, actions taken by FINMA have resulted in the Swiss digital bank being placed into bankruptcy. For the time being, as we did with our FTX assets back in 2022, we have elected to impair this holding in full. The remaining key investments within the portfolio (having successfully disposed of our holding in 3iQ during Q1 and realizing a gain of approximately £2.3 million) now comprise Komainu Holdings and WAO Holdings. The former has been a long-standing holding for the Group and an important commercial partner for us since its launch, while the latter represents our holding following the successful merger of Choice (Kingdom Trust) and WAO holdings completed at the end of 2023. This merger has already resulted in a cash distribution to the Group, but we look forward to analyzing the performance of the entity represented by our residual holding as we move towards the end of the year given performance to date has been profitable.
Special Dividend
At the beginning of this year, we announced that the Board of Directors had voted in favor of amending the Group’s dividend policy to allow for the commencement of dividend payments to our shareholders. This initiative was a clear demonstration of CoinShares’ strategic approach, whereby we have successfully balanced growth, facilitated strategic acquisitions, and achieved remarkable profitability - all of which now enable us to distribute dividends.
In light of the recent sale of our FTX claim mentioned above, the Board of Directors has decided to distribute a special dividend. We believe that in the current positive interest rate environment, and with our stock price still below its pre-FTX levels, it is necessary to recognize the trust and loyalty our shareholders have placed in us.
As the CEO of this company, I want to reassure our shareholders that our commitment to fueling innovation and expansion remains steadfast. The recent acquisition of Valkyrie’s ETP business is a testament to this. The distribution of dividends does not prevent us from continuing to innovate and grow. We have a solid balance sheet that enables us to strike the right balance between rewarding our shareholders and investing in the future of CoinShares.
Investor Relations
In Q2, we began to see the tangible results of our strategic Investor Relations efforts that commenced last year. This was evidenced by the coverage of CoinShares stock initiated by reputable Nordics firms like ABG Sundall Collier and Redeye, highlighting a potential promising future outlook for the company in their analysis.
To further enhance our communication with the investment community, we launched a completely new Investor Relations website. This platform provides investors with a clear and comprehensive description of our company, our unique value proposition, and detailed financial results.
These initiatives underscore our commitment to transparency and proactive engagement with our shareholders, especially in the Swedish market. By improving access to information and strengthening our Investor Relations, we aim to foster a deeper understanding of CoinShares’ position, performance, and growth potential within the digital asset industry.
As we close our 13th quarter as a listed company, I am hopeful that this could be a very successful yearfor the Group, demonstrating our potential to drive growth and deliver solid business results. Over time, we have evolved into a stronger, more focused, and continuously growing company.
"EARLY WINTER AND A GREAT INTEREST IN SKI HOLIDAYS IN SCANDINAVIA"
Winter arrived earlier than ever before with both cold weather and natural snow at all our mountain destinations from the beginning of November, which brought good conditions for snow production and has meant an early snowy start to the season with a snow depth of between 40–80 cm. We will have fantastic conditions at all our destinations for the Christmas and New Year holidays and, above all, this will ensure a long winter season.
Operating profit declined by SEK 13 million in the period, equivalent to 3 percent. The most significant reason is the unusually favourable weather conditions for snow production and other work carried out in order to prepare the slopes during the pre-season. This has resulted in higher costs, mainly related to earlier snow-making, but has also meant an early start to the season, increased revenues and great interest from our guests.
Bookings, measured as the number of overnight stays booked through SkiStar’s mediated accommodation, are 9 percent higher than previous year, meaning that more than 80 percent of the season’s estimated accommodation sales are already booked. A strong Christmas and New Year period with high occupancy awaits us. Despite the weaker economy, many continue to choose to invest in a mountain holiday. The favourable value of the Swedish and Norwegian krona has also affected the foreign market, where we can see increased growth in the number of guests, notably from Denmark, but also from Germany, England and the Netherlands.
Prior to the season, large investments and additional acquisitions were made in our core operations. With two new express lifts, improved snow production and the development of existing ski areas and ski school operations at all destinations, our guests can have a fantastic winter experience, as well as access to ski products at all our destinations.
Retail operations continued to develop positively, despite a declining industry, and sales during the period have increased, both online at skistarshop.com (59 percent) and in our physical stores (32 percent). This resulted in an overall sales increase of 54 percent during the quarter.
Our climate targets were approved by Science Based Targets (SBT) during the previous financial year. We are currently taking the next step by clarifying our sustainability commitments within the areas of climate change. We are now focused on preserving white winters and reducing greenhouse gas emissions by 2030. By engaging with employees, guests, partners and interested members of the public, we want to create a driving force to help address climate change. We therefore invite everyone to participate in our sustainability efforts in order to make more informed choices and contribute to reducing greenhouse gas emissions. By working together, we can preserve white winters and ensue that snowy experiences remain part of our future.
We look forward with confidence to another great winter season at all our six destinations and I hope to see you on the slopes.
Stefan Sjöstrand, CEO
SkiStars 2023/23 Q1 report
"EARLY WINTER AND A GREAT INTEREST IN SKI HOLIDAYS IN SCANDINAVIA"
Winter arrived earlier than ever before with both cold weather and natural snow at all our mountain destinations from the beginning of November, which brought good conditions for snow production and has meant an early snowy start to the season with a snow depth of between 40–80 cm. We will have fantastic conditions at all our destinations for the Christmas and New Year holidays and, above all, this will ensure a long winter season.
Operating profit declined by SEK 13 million in the period, equivalent to 3 percent. The most significant reason is the unusually favourable weather conditions for snow production and other work carried out in order to prepare the slopes during the pre-season. This has resulted in higher costs, mainly related to earlier snow-making, but has also meant an early start to the season, increased revenues and great interest from our guests.
Bookings, measured as the number of overnight stays booked through SkiStar’s mediated accommodation, are 9 percent higher than previous year, meaning that more than 80 percent of the season’s estimated accommodation sales are already booked. A strong Christmas and New Year period with high occupancy awaits us. Despite the weaker economy, many continue to choose to invest in a mountain holiday. The favourable value of the Swedish and Norwegian krona has also affected the foreign market, where we can see increased growth in the number of guests, notably from Denmark, but also from Germany, England and the Netherlands.
Prior to the season, large investments and additional acquisitions were made in our core operations. With two new express lifts, improved snow production and the development of existing ski areas and ski school operations at all destinations, our guests can have a fantastic winter experience, as well as access to ski products at all our destinations.
Retail operations continued to develop positively, despite a declining industry, and sales during the period have increased, both online at skistarshop.com (59 percent) and in our physical stores (32 percent). This resulted in an overall sales increase of 54 percent during the quarter.
Our climate targets were approved by Science Based Targets (SBT) during the previous financial year. We are currently taking the next step by clarifying our sustainability commitments within the areas of climate change. We are now focused on preserving white winters and reducing greenhouse gas emissions by 2030. By engaging with employees, guests, partners and interested members of the public, we want to create a driving force to help address climate change. We therefore invite everyone to participate in our sustainability efforts in order to make more informed choices and contribute to reducing greenhouse gas emissions. By working together, we can preserve white winters and ensue that snowy experiences remain part of our future.
We look forward with confidence to another great winter season at all our six destinations and I hope to see you on the slopes.
Stefan Sjöstrand, CEO
(Q1 2023: £7.0m)
[Q2 2023: £10.7m]
[Q2 2023: £5.3m]
(Q1 2023: £7.0m)
[Q2 2023: £8.2m]
[Q2 2023: £11.4m]
[Q2 2023: £0.048]
Investment case
Affärsområden
Finansiell översikt
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Tillväxtstrategi
Intensifiering av distributionen i EU
Acceleration i USA
Korslistning av amerikanska produkter i andra regioner
Produktinnovation i EU och USA
Utöka geografiskt fotavtryck
Inriktning på ytterligare förvärv som kommer att omvandla underpresterande tillgångar till lönsamma, i linje med vår tillväxtstrategi
Team
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Väsentliga uppdrag utanför bolaget:
Magisterexamen i matematisk handel och finans från Sir John Cass Business School.
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Magisterexamen (utmärkelser) i internationella relationer från University of St Andrews och doktorsexamen i juridik från University of Law.
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Magisterexamen i sinologi från School of Oriental and African Studies, University of London.
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Utexaminerad från Celsa - Sorbonne Université (Grande Ecole of Communications & Journalism) och Hasso Plattner Institute School of Design Thinking.
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Pionjärer inom digitala tillgångar sedan 2014
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