WisdomTree’s Crypto Holdings Down Over 60% in 2022 Q4

• Despite a rise in quarterly income to $73.31M, there was a net loss of $28.3 million.
• WisdomTree’s crypto portfolio dropped in value by $235 million in the Q2 of 2022.

The protracted bear market in Bitcoin and other cryptocurrencies led to a dramatic decrease in the value of WisdomTree’s digital asset holdings in the fourth quarter of 2022.

As of December 31, 2022, the total value of the cryptocurrency funds managed by WisdomTree was $136 million. Down from $163 million at the beginning of the quarter, a $23 million depreciation. This was reported in the company’s quarterly financial report on February 3.

Redemptions and withdrawals from the funds totaled only $4 million throughout the period. WisdomTree’s crypto portfolios were valued at $357 million a year ago.

Prolonged Crypto Market Effect

Despite a rise in quarterly income to $73.31 million, the fund manager reported a net loss of $28.3 million for the period. For the ninth straight quarter, net inflows exceeded outflows, totaling $5.3 billion. Like the whole cryptocurrency market, WisdomTree’s crypto portfolio fell by over 62% year over year. 

Moreover, WisdomTree’s crypto portfolio dropped in value by $235 million in the second quarter of 2022. Accounting for the majority of the company’s total crypto loss. When Terra Luna and its associated hedge fund, Three Arrows Capital, and crypto lender, Celsius, all went bankrupt in July, the cryptocurrency markets were in disarray.

Furthermore, several of WisdomTree’s funds are dedicated to the blockchain, allowing investors to get exposure to the digital asset market via the company’s usage of established financial mechanisms. WisdomTree received approval from the SEC in December to add nine blockchain-enabled ETFs to its platform. Despite this, the securities regulator has repeatedly shot down attempts to create a Bitcoin spot exchange-traded fund.