• WisdomTree’s crypto portfolio fell in value by $235 million in Q4 of 2022.
• As of December 31, 2022, the total value of cryptocurrencies managed by WisdomTree was $136 million.
• The prolonged bear market in Bitcoin and other cryptocurrencies led to a dramatic decrease in the value of WisdomTree’s digital asset holdings.
WisdomTree Crypto Holdings Fall
WisdomTree, a fund manager specializing in digital assets, experienced a significant drop in its crypto portfolio during the fourth quarter of 2022. With redemptions and withdrawals totaling only $4 million throughout the period and a net loss of $28.3 million for the quarter, the total value of cryptocurrencies managed by WisdomTree dropped from $163 million at the beginning of Q4 to just $136 million on December 31st.
Prolonged Bear Market Affects Portfolio
The prolonged bear market in Bitcoin and other cryptocurrencies led to a dramatic decrease in the value of WisdomTree’s digital asset holdings over this period. In fact, as compared to one year ago when their crypto portfolios were valued at $357 million, there was an overall reduction by over 62%. This steep decline can be attributed mainly to bankruptcies such as Terra Luna and Three Arrows Capital as well as Celsius’ crypto lender all going bust during July 2022.
SEC Approves ETFs
Despite these losses, WisdomTree has still been making strides towards furthering their presence within cryptocurrency markets with their approval from the SEC to add nine blockchain-enabled ETFs onto its platform back in December 2022. However, despite this approval from the regulator, attempts have been shot down time and time again for creating a Bitcoin spot exchange-traded fund (ETF).
Continued Growth Despite Losses
Despite its losses during Q4 2022, it is worth noting that net inflows exceeded outflows for WisdomTree for nine straight quarters with total inflows amounting up to an impressive $5.3 billion over this period. This is likely due to their usage of established financial mechanisms which allows investors to get exposure into digital asset markets via their funds; something that could be seen as attractive amongst those who are risk-averse or newbies looking into entering cryptocurrency fields without having much knowledge about them beforehand.
In conclusion then it is clear that despite suffering major losses due to cryptocurrency markets being bearish during Q4 2020; WisdomTree has still come out relatively well with continued growth within its platform regarding net inflows exceeding outflows and receiving approval from SEC for adding nine blockchain-enabled ETFs onto its platform which allows users to gain exposure into digital asset markets without necessarily having large amounts of knowledge beforehand.