• WisdomTree’s crypto portfolio decreased in value by $235 million in Q2 of 2022.
• The value of WisdomTree’s digital asset holdings at the end of Q4 was $136 million.
• The SEC has repeatedly denied attempts to create a Bitcoin spot exchange-traded fund.
WisdomTree Crypto Holdings Drop Over 60%
WisdomTree, a fund manager for cryptocurrency investments, reported a net loss of $28.3 million in the fourth quarter of 2022 despite increasing quarterly income to $73.31M. This decrease is largely due to a drastic drop in the value of its digital asset holdings, which fell from $163M at the start of Q4 to just $136M by year’s end – representing an overall decrease of over 62%. Redemptions and withdrawals from the funds totaled only $4 million throughout this period as well.
Prolonged Crypto Market Effect
The prolonged bear market in Bitcoin and other cryptocurrencies was responsible for this dramatic decrease in value for WisdomTree’s crypto portfolio over the past four quarters, with total losses amounting to nearly $235 million for the second quarter alone. Furthermore, several funds managed by WisdomTree are specifically dedicated to blockchain investments, allowing investors exposure to digital assets via established financial instruments. However, despite receiving approval from the SEC in December 2020 to add nine blockchain ETFs to its platform, attempts have been continually shot down by regulators regarding creating a Bitcoin spot exchange-traded fund (ETF).
Three Arrows Capital and Celsius Bankruptcies
July saw Terra Luna and its associated hedge fund Three Arrows Capital go bankrupt alongside crypto lender Celsius; all three events contributed heavily towards disarray within cryptocurrency markets that has since impacted many investors worldwide including those investing through WisdomTree’s crypto portfolios..
Net Inflows Exceed Outflows
Despite these recent losses however, net inflows still exceeded outflows for the ninth consecutive quarter with total amounts reaching up to $5.3 billion – indicating widespread demand for investment opportunities within this sector remains high regardless of current market conditions..
SEC Approval For Nine Blockchain ETFs
In an effort combat further losses from occurring due to bear markets within cryptocurrency, WisdomTree received approval from SEC authorities last December regarding their plans to add nine blockchain ETFs – marking another milestone moment within their history as one of the first major finance companies offering access into blockchain investments through conventional methods such as stocks and bonds..