Wisdom Tree takes 36% loss in crypto assets in Q3

Investment management firm Wisdom Tree reported a 36% decline in its crypto holdings, which slid to $178 million at the end of the third quarter.

In an earnings report filed with the SEC on Oct. 28, Wisdom Tree said its total asset under management fell 4.6% to $70.9 billion, while it recorded a $1.7 billion inflow since the start of the year.

For crypto-specific assets, Wisdom Tree saw its holdings fall by 36% as it lost roughly $87 million between June and September. Its financial statement recorded $265 million in crypto assets at the end of the second quarter, which fell to about $178 million at the end of the third quarter.

On a year-to-year basis, Wisdom Tree’s crypto holdings have fallen approximately 55% from $277 million to $178 million. The declining earnings are largely due to Bitcoin’s performance, which has lost over 60% of its value over the last year.

Notwithstanding, Wisdom Tree President Jarrett Lilien remains optimistic that the investment firm will recover as it continues to seek a bitcoin spot ETF approval from the SEC.

Lilien said:

“We’re building the foundation that will allow us to lead in the coming evolution of financial services and lay claim to the deepest exposures in the digital wrapper…”

He added that WisdomTree is working to expand its blockchain-enabled services to merge spending, saving, and investing.

Wisdom Tree CEO Jonathan Steinberg said that the firm will be expanding beyond ETF and will reflect the pivot in its identity by Nov. 7. It will be named Wisdom Tree, while removing ETF from its WT ticker.

VCs losing big

The decline in the crypto market is felt not just by the average retail investor, but also by leading investment firms.

Venture capital firm a16z with over $7.6 billion investment in crypto, said it lost over 40% of its assets in the first half of 2022. It had raised about $4.5 billion in May to take advantage of the bear market.

However, a16z partner Chris Dixon said the firm is unperturbed as it will keep investing in crypto, to see that entrepreneurial and developer activity continues.