CoinShares PLC (CSHR) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the CoinShares H1 2026 Earnings Broadcast. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host, Jeri-Lea Brown. Thank you.

Good morning, everyone, and thank you for joining us. Before we begin, CoinShares would like to remind everyone that statements made on today's call and webcast will include forward-looking statements, including statements about plans, goals, expectations and aspirations for the company. Such forward-looking statements are based on current expectations and assumptions and are not guarantees of future performance or success. The statements are subject to risks and uncertainties, and actual results may and often do materially differ from those expressed or implied in the forward-looking statements. For a discussion of these risks and uncertainties, please refer to the CoinShares annual report on Form 20-F for the fiscal year ended December 31, 2025, and other filings with the SEC. CoinShares undertakes no obligation to update any forward-looking statements, except as may be required by law. In addition, during this call, CoinShares will refer to certain non-GAAP financial measures. The non-GAAP measures may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these measures in the same manner. Management believes these measures provide useful supplemental information but they should not be considered substitutes for financial measures prepared in accordance with U.S. GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings press release and investor presentation, which has been filed with the SEC and are available on our Investor Relations website. Today's earnings call will be delivered by Jean-Marie Mognetti, Chief Executive Officer; and Richard Nash, Interim Chief Financial Officer. Jean-Marie, over to you.

Thank you, Jeri-Lea, for this legal disclaimer. So this is a particularly significant release for CoinShares. It is our first results presentation since completing our U.S. listing, and it marks the beginning of our ongoing communication with the market as we settle into our life as a U.S. NASDAQ-listed company. I'm going to start with the headline story of the first half, and then Richard will take you through the number in more detail. The first half of 2026 was, in many ways, a stress test for our business model. Digital asset markets experienced one of the sharpest contraction in recent years. Bitcoin ended the period down approximately 32% since the beginning of the year. Ethereum was down approximately 48% and our assets under management declined by approximately 25%. But what matters to me is how the business performs to that environment. And I think there are 6 proof points worth double clicking on. First point, our clients stayed with us, and we generated positive net flows despite the significant decline in asset values, CoinShares recorded approximately $28 million of net inflows during the period. That distinction matters, our AUM decline because market declined, not because clients were leaving the platform. Second point, our flows materially outperform the market. While the broader industry experienced meaningful redemptions, CoinShares generated positive organic growth. Within that, our Physical platform in Europe, our growth engine attracted approximately $156 million of net inflows, demonstrating the continued migration and strength of our core European franchise. Third point, the economics of our asset management business remain resilient. We generated $40 million of management fees during the half. Revenue declined primarily because lower digital asset price reduced average AUM. We also continue to see the product mix of our European business ship from our legacy XBT products towards our newly Physical platform and Block Index continuing our product diversification. In other words, the principal pressure on asset management revenues came from the market environment and associated change in product mix, not from a deterioration of the franchise. Fourth point, capital market remains strong through an exceptionally difficult environment. Capital markets generated approximately $15 million of segment revenue and gains during the half. That result reflects the way we manage this business, we reduced lending activity and maintain a conservative approach to balance sheet deployment as market conditions deteriorated. Fifth point, the underlying operating businesses remain profitable despite the severity of the market correction. We generated $21.6 million of segment EBITDA during the first half. This figure also includes several one-off costs not taken through equity in association with the listing and U.S. GAAP conversion totaling a circa $4.9 million. Segment EBITDA adjusted for this amount would be closer to $26.5 million. The difference between that underlying segment performance and our reported GAAP loss is important. The reported result includes the unrealized loss on the group XBT Pricing Differential, costs associated with completing our NASDAQ and transition to U.S. GAAP, the settlement of our historic share option plan and below operating income, the mark-to-market impact of our digital asset treasury position. And sixth point, we entered the second half with both the balance sheet and the platform position to benefit from the recovery. On June 30, we had approximately $453 million of net assets, no long-term debt, having repaid our loan to [ Intesa ] Bank and approximately $414 million of available capital. Since then, digital asset market has begun to recover. Bitcoin increased approximately 34% between June 30 and August 31, and our AUM has recovered to approximately $6.9 billion by the end of August, moving back toward December 2025 levels. So when I step back from the individual numbers, the message from the first half is relatively simple. The market contracted sharply, and we weathered the storm well, as we have done many times in the past. Clients continue to allocate to us. Our core asset management segment remain profitable. Our capital market segments remain profitable, we preserve capital when conditions warranted it and we finished the period with a very strong balance sheet. That is what we mean when we talk to our investors during the pre-IPO roadshow about our resilience, not avoiding market cycle, but having a business model built to navigate through them. And importantly, we are not standing still. We are continuing to build beyond passive listed product across active strategies, taking on share infrastructure and new investment exposures with one objective to make the frontier investable. It is again that backdrop and with the balance sheet strength that our Board has put forward a proposal for a multiyear share repurchase program of up to 25% of shares outstanding. We will ask shareholders to approve this at our upcoming AGM tomorrow. With that, I'll hand it over to Richard to take you through the financial performance in more detail. Richard, over to you.

Thank you very much, Jean. So now let me take you through the key financial results for the first half of the year and importantly, how the market environment interacted with our business model during this time. So as Jean mentioned, the first half saw a significant contraction in digital asset prices. Against that backdrop, our assets under management ended the period at $5.5 billion, down from $7.4 billion at December and $8 billion as of June last year. The important point is the composition of that decline. During the first half of 2026, approximately $1.9 billion of the reduction in AUM was attributable to market movements, while the group generated approximately $28 million of positive net flows across our various platforms. So as previously mentioned, the decline in AUM was overwhelmingly market driven rather than the result of client redemptions. Looking at the income statement. Our total GAAP revenue for the period was $51.4 million compared with $80 million in the prior year period. Within Asset Management, the contribution to that top line figure was $40 million, down 33%, principally reflecting lower average AUM in the period. The remaining revenue was attributable to our capital markets lending and stacking activities with further trading gains generated by the operating segment of $3.5 million, bringing the top line to $14.9 million of segment revenue and gains compared to $26.5 million in the prior year period. As previously mentioned, we deliberately maintained a conservative approach to capital deployment during the period, including reducing lending activity as market conditions deteriorated. Segment EBITDA for the period was $21.6 million compared with $59 million for the first half of 2025. The decline reflects the operating leverage inherent in our model. Management fees respond relatively quickly to changes in AUM, while a significant proportion of our operating cost base is fixed in the short term. Reported expenses were also elevated by costs that we do not expect to recur at the level incurred in the first half of the year, principally costs attributable to the completion of the NASDAQ listing and transition to U.S. GAAP. The quantum of the nonrecurring fees impacting our second EBITDA in H1 totaled circa $4.9 million. And as an illustration, had we not incurred such fees, our segment EBITDA would have been $26.5 million for the period. So while profitability contracted materially, the underlying operating business remained profitable through a very difficult market environment. Looking past our segment EBITDA and to our operating loss for the period. Compared to last year, we have swung from a gain of $75.9 million to a loss of $5.1 million in H1 2026, driven principally by 2 items outside of day-to-day operations, a $6.1 million share-based compensation charge on settlement of the group's historic option scheme in connection with the NASDAQ listing and a $34.7 million unfavorable swing in the XBT Pricing Differential from an $18.1 million gain in 2025 to a $16.6 million loss in 2026. The latter is a meaningful but unrealized swing, which has a significant impact on our financials. It arises from temporary valuation differences between underlying spot digital assets held and the trading price of our XBT certificate liabilities and hence, is always adjusted for in our segment EBITDA accordingly, regardless of whether it's resulting in a gain or a loss. Turning to capital allocation. During the first half of the year, we undertook a capital repayment of 100% of our long-term debt of $20.3 million, paid approximately $21.5 million in dividends and incurred approximately $18.7 million of cash costs settling a portion of our historic share action plan. This is the same settlement I referred to before that resulted in a $6.1 million charge to the P&L. Despite these uses of capital, we ended June with $413.9 million of available capital, inclusive of the agreed XBT fees force alongside approximately $453 million of net assets, no long-term debt. So the financial picture for the first half is relatively straightforward. Lower digital asset prices reduced our AUM and therefore, our revenue. The operating leverage in our model amplified that impact on profitability, but client flows remain positive both operating segments remain profitable, and we exited the period with a very strong balance sheet. That provides us with considerable flexibility as we move into the second half of the year. Okay. So now I just want to spend a moment putting our flow performance into context because I think this is one of the most important indicators of the underlying health of the business. While the net inflow figure of approximately $28 million may not look particularly significant in isolation, the context, of course, matters here. As you can see from the chart, most of our major peers experienced significant redemptions during the same period. Across the group shown here, there were more than $7 billion of net outflows, equivalent to approximately 6% of the combined opening assets of these peers. CoinShares by contrast, remained in positive territory. So while falling digital asset prices affected everyone in the industry, our clients' behavior was materially different. And underneath that group number, there is another important development. CoinShares Physical generated approximately $156 million of net inflows during the first half of the year despite the severity of the market correction, and that more than offset a significant proportion of the outflows from our legacy XBT platform. Within Europe, capital continues to be allocated towards a platform we have been building for the future. So for us, this chart is not simply about outperforming peers on flows, is evidence that the business retained client capital through a severe market correction, while our strategic physical platform continued to attract new assets. Now let's take a bit of a closer look at the mechanics behind that decline in AUM because it's an important distinction between losing assets to your market and losing assets through clients. As you can see on the left, Bitcoin declined approximately 33% during the first half and Ethereum approximately 47%. Of course, that market corrections flow directly through to the value of a significant portion of our AUM. We've then divided the portfolio into 2 broad categories, our high fee-generating products and our access products. In our high fee-generating products, net flows were approximately flat, just under 1% negative, while market movements reduced AUM by approximately 42%. So almost the entire contraction in that part of the business came from asset prices rather than redemptions. The picture is slightly different again in the access product. Here, we generated approximately 2% positive net flows, while the market impact was much more limited at around 10%. Significant reason for that resilience was the Block Index. While our digital asset ETPs were affected directly by falling Bitcoin and Ethereum prices, Block benefited from the performance of its underlying equities helping offset some of the broader weakness across digital assets. That diversification matters, but there is a trade-off. Access products generally carry lower management fees than our legacy higher fee products. So as the mix of our AUM shifts towards access and physical products, that creates some pressure on our blended field. I'll come back to that in a moment. But from an AUM and business perspective, the message is very clear. We did not lose $1.9 billion of AUM because clients withdrew $1.9 billion. We generated positive net flows. And that distinction matters on the way back up just as much as it does on the way down. Assets lost to redemptions, you have to win them back. But the assets reduced by market prices participate directly when those markets recover. And we are already seeing that effect. By the end of August, the group AUM had recovered to approximately $6.9 billion compared with $5.5 billion as of the 30th of June. So the first half decline in AUM tells you much more about what happened in the digital asset prices in the market than it does about what happened to CoinShares. I mentioned Block previously on the previous slides. So let's just take a little bit of a closer look at that because it illustrates an important part of the diversification within the asset management platform. For those less familiar with the product, the CoinShares' Blockchain Global Equity Index or Block as we refer to it, provides exposure to listed companies participating in the blockchain and digital asset ecosystem. Invesco does the distribution and product wrapping and the maintenance while we focus on the portfolio management piece. The product carries a 65 basis point management fee, which we share with Invesco, resulting in approximately 32.5 basis points of management fee revenue for CoinShares. What is particularly interesting is what happened during the first half of the year. As you can see here on the left, the Block performed very differently from the underlying digital asset markets. By the end of June, Block was up approximately 18%, while Bitcoin and Ethereum obviously moved in the other direction. And that relative performance had a meaningful impact on the composition of our overall AUM. At the end of December 2025, Block represented approximately 18% of the overall AUM, and that rose to 28% by the end of June. In dollar terms, the AUM increased from $1.3 billion to $1.56 billion despite approximately $24 million of net outflows on the product. So the increase is, therefore, entirely driven by appreciation in the underlying equities. And this illustrates something important about the architecture of CoinShares. We're not building a business dependent on a single product, a single digital asset or even a single form of exposure. Our clients can access the asset class directly through products such as our physical platform or through listed equities participating in the broader digital asset ecosystem through Block. Those exposures have different return drivers. And in the first half, that diversification materially improved the resilience of our overall AUM. There is, as I mentioned earlier, a fee mix consequence, however, Block generates a lower fee yield for CoinShares in some of our legacy products. But strategically, this is exactly why we have been broadening the platform. We want to give investors multiple ways to participate in the digital asset ecosystem because the different parts of that system will perform differently at different points in the cycle. So given the change in product mix we've just discussed, I want to spend a moment on our asset management fee yield because the distinction between pricing and mix is very important. Our blended fee yield declined from approximately 156 basis points in 2025 to 128 in the first half of '26, but that decline does not reflect broad-based fee compression across our products. And you can see that on the left-hand side. At the individual product category level, yields have remained remarkably consistent. Our high fee-generating products remained broadly within a 255 to 284 basis point range, while our access products have remained between approximately 22 and 27 basis points. So we've not seen a material deterioration in the pricing of the underlying products. What has changed is the relative weight within the overall AUM and the bridge on the right shows this clearly. Starting from an average fee yield of 156 basis points in 2025, approximately 25 basis points of the movement into 2026 is attributable to the increased weighting of Block with a further 7 basis points attributable to the changing mix of the CoinShares Physical Bitcoin product and CoinShares U.S. Actual changes in product level fee rates account for only approximately 4 basis points. And I think the most useful way to understand that is to look at the constant mix calculation. Had our product mix remain unchanged -- had our product mix remained unchanged, our fee yield would have been approximately 163 basis points. So the conclusion is quite straightforward. The reduction in our blended fee yield is predominantly a portfolio mix effect, not evidence of structural pricing pressure. So when assessing pricing power within asset management, I would encourage you to look at both the underlying product level yields and the evolution of our AUM mix rather than interpreting movements in the blended yield as prices changing. Okay. So turning now to Capital Markets. This is obviously a very important part of the coin shares model because it gives us multiple ways to generate returns from digital assets beyond simple management fees. During the first half, we deliberately operated this business conservatively as market conditions deteriorated, particularly around the deployment of our balance sheet. Despite that environment, the Capital Markets operating segment generated $14.9 million of revenue and gains compared to $26.5 million in the prior year period. We're referring to this as segment revenue and gains as the figure is adjusted to remove the impact of the movement on the XBT Pricing Differential which we disregard in our operating segments due to its nature, as mentioned previously. Anyone who wants any further detail on that, you can look within our MD&A and the notes to our unaudited interim financials. [indiscernible] into a lot more detail. But let me walk through the components of the $14.9 million for you. So staking generated $6.6 million compared with $9.8 million last year. This decline primarily reflects the reduction in the value of the assets being stated during the period rather than a fundamental change in the economics of the activity. Lending generated $2.4 million compared with $4.9 million last year, and this is an area where the reduction was much more deliberate. As market conditions became less attractive, we reduced the amount of capital we were prepared to deploy into lending and prioritize preservation and counterparty risk management. Other revenue and trading gains contributed approximately $7.6 million compared with $11.7 million in H1 2025, reflecting gains from liquidity provisioning on the group's XBT product line and a range of delta neutral trading activities with the overall amount moving broadly in line with the wider contraction of gross capital markets activities during this period. Taken together, Capital Markets generated $14.9 million of segment revenue and gains. And I think the important point here is not simply that this was lower than last year. The Capital Markets segment remained profitable, while we were deliberately reducing risk and balance sheet deployment. And that's how we think about this business. We don't have a revenue target as far as to deploy capital irrespective of the market conditions. We deploy capital when we believe the risk-adjusted opportunity is attractive. And when we don't, we preserve it. As market conditions, liquidity and opportunity sets evolve, we have the balance sheet and the infrastructure to increase that deployment again. So capital markets, as it always has done, provides a complementary earnings engine to asset management while giving us discretion over how much capital we put at risk through different parts of the cycle. Okay. So let me now turn to our cost base because as mentioned previously, the reported expenses in the first half, don't tell the full story of the underlying operating cost base of the business. On an adjusted basis, so excluding depreciation, amortization and share-based comp, operating expenses were approximately $25.6 million during the first half. Within that, we have identified approximately $4.9 million of costs that are associated primarily with becoming a U.S.-listed company and other nonrecurring items. While these are nonrecurring in nature, we do see these as important investments we made to complete the transition to NASDAQ and established CoinShares as a U.S.-listed public company. Excluding those items, first half adjusted operating expenses would have been approximately $20.7 million. For context, simply annualizing that first half number would equate to approximately $41.3 million for the year. Although I want to be clear that we're assuring that purely as an illustration of the underlying H1 cost base of the present business rather than providing any forward cost guidance. A significant portion of our cost base is relatively fixed in the short term while the asset management revenues move with AUM. Now that worked against us during the first half of the year as digital prices and AUM decline. But equally, we do not need to rebuild the operating platform for revenues to participate in an increase in AUM. So the key takeaway from this slide is that the first half reported cost base included a meaningful concentration of expenditures associated with completing our U.S. listing and our financial reporting transition rather than representing a comparable underlying operating run rate. Looking ahead, we will continue to monitor actively our cost base and identify opportunities for further efficiency. As part of that discipline, we have already taken a decision to close a number of underperforming product lines in the second half of the year and that's just a routine part of managing a product suite of the size we have now and one that helps ensure our cost base is aligned with where we see genuine client demand. Okay. So this next slide is intended to help illustrate the operating leverage embedded in our business model. I want to be very clear upfront here. These are not forecasts or guidance. They are illustrative scenarios just showing how changes in digital asset prices could translate through AU and revenue. And then as a result, optimally profitability using assumptions shown on the slide. Starting on the left, we take our June 30 AUM and ask a relatively simple question, what would that AUM look like if asset prices returned to previous reference points while holding the other assumptions in the model constant? At June 2026 pricing, as we've already mentioned, the group AUM was approximately $5.5 billion, comprising approximately $2.1 billion of high fee-generating products and $3.5 billion of access products. At December '25 reference prices, that illustrated AUM increases to approximately $7.4 billion and going back to June '25, it would increase to $8.1 billion. But importantly, the recovery is not uniform across the portfolio. Our high fee-generating products have significantly greater sensitivity to Bitcoin and Ethereum prices. So they increase much more rapidly under those scenarios in the access products, and that has 2 effects. Yes, AUM increases nice and simple, but also the mix of AUM also shifts back towards higher fee products. And the right-hand side illustrates what that could mean for revenue under the assumption is shown. On an annualized first half basis, the model produces approximately $113 million of revenue and gains being a combination of asset management fees and capital markets segment revenue engaged. At December 2025 reference pricing that increases approximately $162.2 million and further increases if we use the June 2025 reference pricing to $185.6 million. So what we're trying to show here is rather than guidance, we're just trying to illustrate the 2 sources of operating leverage in the model. First, the simple higher asset prices increase their AUM. The second is less obvious, but equally is important because our higher fee products have greater sensitivity to crypto prices, a recovery can also improve the mix of our AUM and therefore, the blended economics of the asset management segment. Again, these are purely illustrative scenarios rather than forecast. Their purpose is simply to show the sensitivity of the model to different market environments. When we also consider the relatively fixed cost base of the underlying business and if this is to remain the case, a significant portion of the benefits from market recovery go directly to our segment EBITDA. Okay. So while the scenarios we've discussed are purely illustrative, the first part of some of that mechanism, the relationship between digital asset prices and our AUM is already visible in the post-period data. Between June 30 and August 31, digital asset markets recovered fairly materially. Solana increased approximately 57% and Ethereum approximately 40% and Bitcoin approximately 34%, and that recovery translates directly into our AUM. We've increased from $5.5 billion as of June 30 to approximately $6.9 million as of the end of August. That's an increase of approximately 25% in 2 months. Also, as of the 31st of August, we had reversed the majority of the treasury loss seen in the first half of the year. And importantly, during this period, clients have also continued to allocate capital with approximately $74 million of positive net flows through to the end of August. And we're beginning to see that mix effect that we illustrated on the previous slides. High fee-generating products were 37% of overall AUM at June 30, by the end of August, that's increased to 43%, reflecting the greater sensitivity to the recovery in digital asset prices. So what we're seeing since June is consistent with the mechanics that we've just described. Higher digital asset prices are increasing AUM, the mix is beginning to shift back towards higher fee products and clients have continued to add net new capital. I would, however, emphasize that much of this market recovery occurred relatively late in the period so please don't read that August 31 AUM position as a representation of what the entire quarter will be like. But it does provide a useful indication of how quickly the economics of the business can change as the market conditions change. We entered the second half with $5.5 billion. We're now at $6.9 billion, and we haven't had to replace any asset loss through client redemptions. And that brings us back to the central message from the first half of the year, right? The market contracted sharply. It's impacted our financials. We've got some below-the-line items that are hitting on a bottom line basis. But our AUM net inflow, we got positive segment EBITDA and that retention really matters when the markets begin to [indiscernible]. So finally, let me finish the financial section. And by just looking at our capital position, our available capital position in a little bit more detail. So we began the year with approximately $453 million of available capital. That's net of the liability on for our long-term borrowings, which we've now repaid. And we've ended June with approximately $414 million. So the important question is what happened to the capital during that period to disclose that decrease? So we completed our U.S. listing, which generated approximately $3.9 million of proceeds but we've had a number of outgoings in relation to this period. So we repaid the long-term debt, which I already mentioned, of $28.3 million. We returned approximately $21.5 million to shareholders through the 2025 dividend prior to closing the transaction. We incurred approximately $18.7 million of cash costs associated with settling a portion of our historic share option plan, which is triggered by the listening. The decline in digital asset prices has resulted in approximately $15.4 million of unrealized losses on our treasury digital asset holdings which as mentioned, has since rebounded post period end. We also paid approximately $4.3 million of bonuses in the period relating to 2025, and we had net finance costs representing a further $4.2 million alongside some several smaller items. So after all of these movements, we ended June with approximately $413.9 million of available capital, alongside approximately $453 million of net assets and no long-term debt. And I think important takeaway from this bridge. We entered an extremely difficult market environment, completed our U.S. listing, repaid all of our long-term debt, returned capital to shareholders settled a significant portion of our historic option obligations, and we still exited the half with a very strong available capital position. So that leaves us in a very good position moving forward. and illustrates how flexible we are and how we can allocate capital as we continue. I will now hand back over to JM.

Well, thank you, Richard. And that was the lion's share of the presentation, but let me continue for a few minutes on more Investor Relations matter. I want to spend a moment on valuation because valuation is an important part of how the Board thinks about capital allocation. Based on the pro forma share count of approximately 138.1 million shares on our closing share price of $5.6 on September 2, CoinShares had a market capitalization of approximately $738 million. Against that, we ended June with approximately $43.9 million of available capital. If you use available capital position as an adjustment to market capitalization, that implies a value of approximately $324.1 million for the operating business. Our June available capital represent approximately $3.14 per share compared to September 2 share price of $5.6. So a significant portion of the current equity value is represented by capital already on the balance sheet, while shareholder written exposure to the earnings power of the operating fronts. That matters for valuation and that matters for capital allocation. We have a strong balance sheet, no long-term debt and significant available capital. At the same time, the Board believes the current share price does not fully reflect the value and earnings potential of the business. And that is why the Board believe having the ability to repurchase shares at appropriate prices and times can represent one example of an attractive use of capital for shareholders, which we will be asking our shareholders to vote upon as up and coming AGM tomorrow. And then finally, I want to touch briefly on another consequence of our transition to the U.S. public markets, potential index inclusion. Based on our current understanding of the applicable criteria, CoinShares may become eligible for inclusion in certain Russell indices at a future reconstitution subject, of course, to the relevant eligibility, ranking and [indiscernible] requirements. There is no certainty here that CoinShares will be included in any potential weighing or associated passive demand would ultimately be determined by the index provider. However, based on [indiscernible] investment banking analysis, potential inclusion could result in a meaningful increase in passive institutional ownership relative to our current trading liquidity. I think the broader point here is more important than any specific estimate. One of the reasons we moved CoinShares to NASDAQ was to broaden access to the company among U.S. institutional investors. Index inclusion is another potential step in that process. Over time, we believe the combination of increased research coverage, we already have KBW and working on others greater institutional accessibility, potential index participation and improved liquidity can help broaden and diversify our shareholder base and support healthier price discovery. But these are developments that will take time. We are actively working on it, but at the same time, we remain focused on building the underlying business rather than predicting short-term share price movements. With that, we will open the call to analysts for questions.

Okay. Turning to questions now. We'd like to invite Joe Wafi from Canaccord to ask the first round of questions. Joe?

Thanks for having me on your call here, your very first earnings call, and congrats on this milestone. Congrats on that very much. Could we maybe just start maybe at a high level on some of the trends going on in the industry. There is a broad push to tokenize real-world assets. Just wondering how CoinShares views this expansion of the digital asset ecosystem and how it may see that as an opportunity for growth? And then I'll have a quick follow-up.

Joe, thank you for joining us. So yes, tokenization didn't escape us. It has been a trend which has been pushing quite strongly over the last 6 months, especially with all the legislation moving ahead in the U.S. When it comes to CoinShares, as usual, we get our 2 segments, we get capital markets and asset management. Capital market is always ahead in that sense versus asset management because we can experiment much more. So our capital market has been at the forefront of tokenization in the sense that we're trading more RWA in general in H1 than we traded Bitcoin or Ethereum, as an example. So we've been very much involved or getting our hands dirty with it and taking advantage of different opportunities which are there and these opportunities continue to be there right now and in the foreseeable future. So that's kind of part of our, I would say, capital management exposure to it. So you can see us being exposed to hyper-liquid being exposed to different protocols on the tokenization side. On the asset management side, so we are not a tokenized here, so we're not going to go in an activity like securitized and activity like [indiscernible] or what the [indiscernible] are doing. However, we are very much planning to find ways to leverage the tokenization movement, which is happening, so that we can create new products. And that's very much the sense of the partnership we discussed in one of our released in H1 with [indiscernible], which is to allow us to effectively start create comfortability and, I would say, a new product on top of the tokenization trend. So it's not being locked up in one ecosystem, which is a [indiscernible] people will go through CoinShares to be able to have a comfortability of asset [indiscernible]. So we're very much looking at it and making sure we offer into the market with an offering.

Joe, do you have a follow-up question?

Yes. Just one quick follow-up. Just now that you're a public company, I'd imagine that maybe M&A is a little bit more part of your playbook. I know you're contemplating some share buybacks as well. So just balancing M&A versus acquiring in some of the existing CoinShares outstanding.

Yes. It's about discussion about capital allocation. The board is very focused on how the capital is being allocated. When the stock is trading where it is trading right now, obviously, share buyback is an obvious kind of mechanism. And that's why the Board is seeking authority from the shareholders at an AGM tomorrow. Depending on the result of this AGM, we'll see if we can do and how we do it and which format we'll do some share buyback. That's the second part of your question. And to the first part of the question, this is to balance with M&A activity. M&A is definitely something we are extremely focused on and I personally spend a lot of time reviewing a lot of opportunities. We just want to make sure we are pulling the trigger on the right, I would say, opportunity, knowing that it's extremely time consuming and so a small deal or bad deal can be detrimental to our performance. So we're really trying to make sure we're going in the right direction on that given also the fact that a lot of these companies, which are today on the market has been, I would say, package with a lot of [indiscernible] and so on. So the [indiscernible] are really clean. So it makes a discussion always a bit more complicated than straight of M&A.

Thanks, JM. Thank you very much for your questions, Joe. We're now going to move over to Alex Bond from KBW. Alex, please join the call.

And strong results, although it was a challenging market backdrop. Obviously, a lot of moving parts in the first half results, but wondering if you could maybe speak at a high level to your outlook for the second half and how demand for some of the asset management products has evolved here as the digital asset pricing backdrop has improved in the month since the first half? And then maybe a bigger picture question as well. But if you can also just walk us through what you all are most focused on from a growth and a new product perspective at the moment. That would be helpful as well.

Thanks, Alex. A lot to unpack. So we're not going too far in what I can say and cannot say. As you said, the market has improved in Q3. As a result, our AUM has recovered. The volatility has picked up a little bit as well, which gives us new trading opportunities. So all in all, I will say that it has been a positive environment for CoinShares. We saw some demand in H1 despite the market going down. We see the demand still there in Q3, albeit a little bit slower by the summer, which has been, for some reason, an extremely long summer maybe due to the World Cup, which take a lot of people attention away and all the sports event, but we saw some demand coming back. At the CoinShares level in terms of what we are prioritizing our efforts, we're still launching some ETF. We're still launching some innovative things. We launched our first [indiscernible] platform, which is public information in July or I think in July. And so that's kind of part of our growth story in Europe. I would say, capital markets is working on tokenization, how tokenization is impacting what we're doing. We're still working on this tokenization aspect of bringing to market tokenization product. I'll discuss with [indiscernible]. So all in all, we are extremely busy from an organic perspective and we hope the market is going to continue to sustain that effort by having price action, which is constructive of people demand.

Thanks, JM. Alex, I think you had a second question?

Yes, yes. Thanks, JM. That was helpful. Yes, maybe just one more. You all have spoken to your desire to continue to evolve the platform. It's more of a diversified digital asset and really asset manager in general. And that like, can you just spend a little bit of time talking through the Bastian asset management acquisition and the potential you see proactively managed strategies as a part of the overall product suite?

Yes. Bastion is an acquisition we did last -- well, we -- the -- we closed last year in September. We completed only in September of this year because there was some regulatory hurdle to clear before we can complete. However, we didn't waited to integrate the team. So the team is fully integrated now into in the CoinShares ecosystem. I think it brings a different type of offering to CoinShares. CoinShares was coming from a hedge fund background. I've been stepping into the ETF world in 2015, 2016 without much knowledge about it, so learn very quickly how to run an ECF asset manager due to the market opportunity there. But that's kind of only catering for effectively the data side of the market. And as the market is evolving, there is more and more demand for a bit of alpha on top. So obviously, beta, if you look at the overall asset management market, the [indiscernible] are always much bigger than the alpha offering, but there is more and more demand coming up and people are asking us to get some better exposure with some alpha on top of it. So being able to offer both solutions within CoinShares ecosystem is very interesting from us. It's also opened up the channel of distribution, like what we do on the on the beta side is listed product, but we do today on the alpha side is nonlisted. So that's open differential distribution has also opened a different market that -- which can travel a bit easily. So for instance, we can have a bit more, I would say, a push in Asia. You can even imagine having some push in the U.S. There is some new CFTC rules around derivatives in the U.S., which need to be analyzed before that can take some more -- some stronger foothold, but like there is definitely an idea that Bastion can be a globally distributed suite of products versus the European offering or the American offering of the ETF side.

Jeri, I think we still -- well, I think the -- another analyst asking question, which is Kevin [indiscernible], if we can just let him come online because I don't see him on the app.

Thanks, JM, can you hear me?

I can hear you.

Great. Thank you. Thanks for let me queue up. JM, I've lost track of how many years I've been on your call. It's certainly over 3. I'm just kind of curious about, I guess, the strategic direction. I know you talked about expanding markets and your press release talked about developing more of your core European presence as well as talking to the active blockchain investment capabilities. I was wondering if you wouldn't mind expanding on that first and then going on to talk a little bit more about expanding in new markets. You just mentioned Asia. I'm wondering if you might add a little more color to that, please.

Okay. So thanks for following us for so long, Kevin. To start, I think we're celebrating our 25th earnings call with Richard today. So it has been definitely a little bit of a ride. When it comes to how we position ourselves. We were born in Europe. We started effectively as a hedge fund, see the opportunity in the wider ETF market, and that's where we focus our attention from 2015. The market is evolving. The market is changing. And CoinShares always added ambition to be a global asset management company, not just a European franchise. So how do we build a global franchise at the forefront of what we are thinking about and why if we can distribute our products in Europe, in Asia and in the U.S., it's a much better position for us than having products which are just for the U.S., Bastian to some degree, not perfectly, but to some degree, help us answer that narrative. When it comes to different product offering we have, we still have our legacy products in Europe. We have our growth platform as well in Europe, which is CoinShares Physical. We added a usage franchise in Europe as well, which allows us to distribute products a bit more widely around the globe. And we still have the question of how we're going to keep scaling in the U.S. and something we are strategically considering and discussing. Does that answer your question, Kevin?

You mentioned the UCIT and I think it was a Bitcoin mining ETF now that's been released. How do you think that positions you within the regulating authorities for following on with further releases in that -- of those types of funds? And how does it create perhaps a moat against other ETF providers?