WisdomTree meets estimates, reveals declining crypto holdings in Q3 earnings

Quick Take

  • WisdomTree met third-quarter estimates, reporting earnings per share of $0.06.
  • The asset manager’s crypto holdings fell to $178 million from $406 million at the beginning of the year. 
  • CEO Jono Steinberg said “blockchain-enabled funds and tokenized exposures are tomorrow’s best structure,” to access various asset classes.

Asset manager WisdomTree met estimates as it reported $0.06 earnings per share for the third quarter, while revealing that its crypto holdings have fallen to less than $200 million.

WisdomTree's crypto assets under management fell from $265 million to $178 million during the third quarter. The fund's crypto holdings have now fallen 56% since January, from $406 million.

"Our approach is to bring crypto mainstream," Jarret Lillien, the firm's COO and president said, apparently unperturbed by the decline.

The asset manager also plans to bring "mainstream exposures, like fixed income, equities, and commodities, into the digital world through blockchain-enabled funds and tokenized exposures," Lillien said.

"We’re building the foundation that will allow us to lead in the coming evolution of financial services and lay claim to the deepest exposures in the digital wrapper, positioning us, in an even larger opportunity, to expand into blockchain-enabled finance, where spending, saving and investing are merged.”

The fall in holdings tracks the decline in crypto prices and the global crypto market capitalization, which has fallen from $2.3 trillion in January to $1.02 trillion today. 

SEC approval of the fund's first blockchain-enabled fund — the WisdomTree Short-Term Treasury Digital Fund (WTSY) — was "yet another digital asset milestone," said CEO Jono Steinberg. 

"WisdomTree remains laser-focused on providing investors with the best product structure to access various asset classes. Today that’s ETFs, but we believe that blockchain-enabled funds and tokenized exposures are tomorrow’s best structure," he said in a blog post. 

Steinberg also noted the firm's digital wallet, WisdomTree PrimeTM, which he said was "an early mover in blockchain-enabled financial services, where spending, saving and investing are merged."

However, the asset manager had to deal with more than price pressure during the quarter, as the SEC rejected its application for a spot bitcoin ETF. 

The WisdomTree Bitcoin Trust was rejected on Oct. 11, after the SEC rolled over the decision in March and August. In keeping with recent rejections, the order said that WisdomTree did not sufficiently meet its burden to protect investors, and prevent fraudulent activity and price manipulation.

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