• WisdomTree’s crypto portfolio lost $235 million in the second quarter of 2022.
• The total value of the cryptocurrency funds managed by WisdomTree was $136 million as of December 31, 2022.
• WisdomTree received approval from the SEC in December to add nine blockchain-enabled ETFs to its platform.
WisdomTree’s Crypto Holdings Down Over 60% in 2022 Q4
WisdomTree’s crypto portfolio dropped in value by $235 million in the Q2 of 2022, bringing the total value of cryptocurrency funds managed by them to $136 million as of December 31, 2022. Despite a rise in quarterly income to $73.31M, there was a net loss of $28.3 million due to prolonged bear market in Bitcoin and other cryptocurrencies. Redemptions and withdrawals from the funds totaled only $4 million throughout the period.
Prolonged Crypto Market Effect
The protracted bear market led to a dramatic decrease in the value of WisdomTree’s digital asset holdings with their crypto portfolios being valued at $357 million a year ago, now being down over 62%. Additionally, WisdomTree reported a net loss of $28.3 million for the period despite a rise in quarterly income to $73.31M and net inflows exceeding outflows totaling up to $5.3 billion for ninth straight quarter.
SEC Approval For Blockchain-Enabled ETFs
To get exposure into digital asset markets via established financial mechanisms, WisdomTree received approval from SEC (Securities and Exchange Commission) for adding nine blockchain enabled ETFs (Exchange Traded Funds) on their platform back in December 2020 . However, SEC has continuously denied attempts made by organizations for creating Bitcoin spot exchange-traded fund .
Terra Luna Bankruptcy Affecting Crypto Market
When Terra Luna and its associated hedge fund Three Arrows Capital along with Celsius crypto lender all went bankrupt last July , it had an immense effect on already volatile cryptocurrency markets causing further chaos . This caused investors to be cautious while investing into these digital assets due to lack security surrounding them .
Despite having authorization from SEC , cryptocurrency market still faces challenges due to various factors such as bankruptcy making it difficult for common users who are not well aware about these digital assets or do not have sufficient knowledge about them investing into this sector without any security or guarantee .