• WisdomTree’s crypto portfolio dropped in value by $235 million in the Q2 of 2022 due to a prolonged bear market in Bitcoin and other cryptocurrencies.
• As of December 31, 2022, the total value of the cryptocurrency funds managed by WisdomTree was $136 million.
• Despite receiving approval from the SEC to add nine blockchain-enabled ETFs to its platform, the securities regulator has repeatedly shot down attempts to create a Bitcoin spot exchange-traded fund.
WisdomTree’s Crypto Holdings Decrease Over 60%
WisdomTree’s crypto portfolio had decreased significantly during the fourth quarter of 2022 due to an extended bear market in Bitcoin and other cryptocurrencies. The total value of all cryptocurrency funds managed by WisdomTree had declined from $163 million at the beginning of the quarter to only $136 million by December 31st 2022. This resulted in a net loss of $28.3 million for WisdomTree despite quarterly income increasing to $73.31M.
Terra Luna Bankruptcy Impact
The failure of Terra Luna and its associated hedge fund, Three Arrows Capital, as well as crypto lender Celsius caused additional turbulence across cryptocurrency markets contributing further decreases in digital asset values held by WisdomTree. Redemptions and withdrawals from these funds totaled only $4 million throughout this period resulting in a year over year decrease greater than 62%.
Despite this significant depreciation, WisdomTree did receive approval from the Securities Exchange Commission (SEC) in December 2020 allowing them to add nine blockchain-enabled ETFs on their platform – diversifying their exposure within digital asset markets through established financial mechanisms. However, efforts made by WisdomTree towards creating a Bitcoin spot exchange-traded fund were denied repeatedly by regulators .
Despite recent downturns Payments giant Visa remains optimistic about potential growth within the cryptos sector with CEO Alfred Kelly Jr mentioning that there is “a lot more upside here than downside” for institutional investors looking towards digital assets for diversification purposes outside traditional markets like stocks or bonds..
Overall it can be seen that while there has been significant depreciation within WisdomTree’s crypto holdings due to an extended bear market – significant positives have emerged such as SEC approval for new blockchain ETF products and positive outlook from Visa which may suggest that brighter days are ahead for those investing heavily within digital asset space