CoinShares Q1 Profits Dip: Macroeconomic Headwinds & Market Volatility Take a Toll
CoinShares, a leading digital asset investment firm with a global presence, reported a decline in its net profit for the first quarter of 2025, marking a significant shift from the previous year’s performance. The company revealed a net profit of $24 million, representing a 42.2% decrease compared to the same period in 2024.
Despite the dip in net profit, CoinShares managed to maintain positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the quarter. However, the margins narrowed compared to the first quarter of 2024, suggesting a challenging operating environment. Last year, CoinShares posted a net profit of $41.5 million and an EBITDA of $35.5 million in the first three months.
In a letter to shareholders, CoinShares CEO Jean-Marie Mognetti attributed the decline to macroeconomic headwinds and volatile financial markets, citing the impact of US President Donald Trump’s global tariffs on trade partners. These factors contributed to significant volatility across financial markets, including a decline in Bitcoin prices, which reached lows of $78,000 during the quarter. The drop in Bitcoin price also impacted CoinShares‘s assets under management (AuM), which fell 10.7% to $1.52 billion by the end of Q1 2025.
The volatility also impacted CoinShares‘s Ethereum-based ETPs. Due to broader market corrections and Ether’s underperformance, the firm experienced $23 million in outflows from its CoinShares Physical Staked Ethereum ETP (ETHE). However, the firm’s ETPs overall contributed to the quarter’s performance. For Q1 2025, CoinShares‘s ETPs saw net inflows of $268 million, with $202 million coming from its Physical Bitcoin (BITC) ETP. This resulted in revenue related to assets under management increasing from $24.5 million to $29.6 million, a rise of 20.8%.
A Broader Industry Trend
CoinShares‘s earnings report reflects a broader trend among crypto firms, who are navigating a period of uncertainty and volatility. The first wave of Q1 2025 earnings from major players like Coinbase, Kraken, and Strategy has shown a mixed bag of results. Coinbase’s revenue fell 10% quarter-over-quarter, with transaction revenue plummeting by 19% to $1.3 billion. Kraken, another US-based exchange, also saw its revenue decline by 7% from Q4 2024.
Michael Saylor’s Bitcoin treasury company, Strategy, and Bitcoin miner Core Scientific missed Wall Street’s estimates. This suggests that the crypto industry is facing headwinds on multiple fronts, and companies are adapting to these challenges.
Navigating the Storm
Despite the challenges, CoinShares remains optimistic about the long-term potential of digital assets. The company continues to invest in its product offerings and strategic partnerships, aiming to capture growth opportunities within the evolving crypto market. In a statement, Mognetti emphasized the importance of navigating these turbulent times. He said, “What we are witnessing is not mere market volatility — it is a wholesale transformation of the global economic order.” This highlights the firm’s commitment to adapting to the changing landscape and leveraging its expertise in the digital asset space.
