CoinShares - An attractively priced option on crypto adoption

We consider CoinShares International (CS) an attractively priced option on the prospective adoption of digital assets. We estimate that CS’s market capitalisation of £204m (on a fully diluted basis) is at present at least 85% covered by the sum of CS’s cash at bank (£13.9m at end-June 2022), net amounts from brokers (£38.1m) and the accrued management fees related to XBT Provider products (we estimate the current balance at c £120m). Moreover, CS is now trading at c 0.93x book value. With a steady fee income and good equity position, we think CS is well placed to be one of the beneficiary survivors of the current ‘crypto winter’.