WisdomTree Sees Revenue Decline in its Q4 Crypto Performance Report

WisdomTree, a New York-based exchange-traded fund sponsor and asset manager experienced a major loss in the value of its digital asset holding in the fourth quarter of 2022. 

Based on its Q4 report, the value of its crypto holdings fell to $136 million as against $163 million which it had at the beginning of that quarter. This decline is a reflection of the overly extended bearish market for Bitcoin (BTC) and other digital currencies.

The plunge from $163 million to $136 million marks a $23 million depreciation, according to the quarterly earnings report. Markedly, this result is a far cry from the $357 million held in WisdomTree’s crypto portfolio in Q4 2021. Compared to its profit of $11.2 million, there was a net loss of $28.3 million in Q4 2022. Also, the company’s operating revenue in Q4 declined from $79.2 million the previous year to $73.3 million. 

Only $4 million worth of redemptions and outflows were handled by the fund manager in this quarter while its net flows were $5.3 million. This indicates the ninth consecutive quarter of positive inflows even though a 62% year-over-year decline was the eventual result. 

WisdomTree Exposed to Bearish 2022 Market

While this result reveals a major decline, it is however consistent with the conditions of the broader cryptocurrency market at the time. 

The year 2022 was a turbulent one for the crypto ecosystem bringing with it several unfortunate situations.

First was the collapse of the Terraform Labs project Terra/LUNA which wiped almost $2 trillion worth of crypto from the industry. Many crypto projects were affected by the unexpected collapse and ended up filing for bankruptcy, and laying off staff to ensure sustainable stability. 

Celsius Network, Three Arrows Capital, Babel Finance and Voyager Digital amongst many others were strongly hit by the bearishness of the 2022 market. Prices of cryptocurrencies began to dip far beyond the all-time high that they had reached in 2021.

Amidst all these sad tales, the FTX liquidity crunch struck, followed by its bankruptcy filing and the resignation of the exchange’s Chief Executive Officer (CEO) Sam Bankman-Fried.