By George Ward
WisdomTree, the asset manager with headquarters in New York City, revealed that their crypto holdings had decreased to $136 million at the end of the fourth quarter. It is a considerable drop compared to the previous year’s end of the same quarter, which was $357 million.
The operating revenue went down to $73.3 million from $79.2 million. This led to a net loss of $28.3 million in the period. In comparison, the same quarter the previous year recorded profits of $11.2 million.
WisdomTree’s approach to digital assets is focused on introducing cryptocurrencies to the general public and bringing traditional assets into the digital space. The report highlighted the asset manager’s new digital wallet WisdomTree Prime, which allows users to spend, move, and invest digital assets.
Already, there is a waiting list for people wishing to test this product. WisdomTree’s inflows for 2022 were $5.3 billion and were primarily due to investments into fixed income, US equity, and commodity products. Net flows from other crypto transactions added another $4 million.
Jarett Lilien, WisdomTree’s Chief Operating Officer and President, stated that the company ended the year with a record-breaking $12 billion loss in net inflows. This loss is troubling for a firm that has been bullish on cryptocurrencies, as the company has seen significant growth in its crypto assets in recent years.
The decrease in the company’s crypto holdings is due to the volatility of the crypto market. The price of Bitcoin and other major cryptocurrencies fell significantly throughout last year’s fourth quarter. Furthermore, the company’s crypto-related investments are still relatively small compared to its overall portfolio.
Even with its losses in the fourth quarter, WisdomTree’s crypto holdings account for less than 1% of its total assets.
The WisdomTree Prime Project
WisdomTree Digital Movement is offering a blockchain-powered digital wallet known as WisdomTree Prime. This service gives users access to various retail payment alternatives like demand deposit accounts (DDAs), money-transferring services, and Visa-branded debit cards.
Moreover, investors can also buy funds through this wallet. The testing phase of the wallet has already started, and more people on the waitlist will get access to it later this year.
According to Peck’s blog, when Jonathan Steinberg, WisdomTree’s CEO, initiated the company, he stated that, as opposed to standard mutual funds, having a brokerage account was the only requirement to access ETFs.
Soon after the virtual version is released, the physical WisdomTree Prime Visa debit card will be available. This card is suitable for making payments on Google Pay, Apple Pay, and Samsung Pay.
The decline in WisdomTree’s crypto holdings is a reminder that the digital asset market is still in its infancy, and investors should be cautious when investing. While the sector has excellent growth potential, the market’s volatility makes it a risky investment.
Hence, WisdomTree remains committed to its core operations and safeguarding its investments to reduce potential losses.
The company is confident that its solid fundamentals and strict protocols will help it withstand existing market conditions and become a frontrunner in the asset management domain. Furthermore, the potential adoption rate of the WisdomTree Prime Wallet could be a boon for the company in 2023.