Fees came in at GBP22m versus Redeye estimates (RRe) of GBP18m. Higher fees for XBTs and Physical are the main reasons for the 24% deviation. We believe the average AUM was c15% higher q/q. At the end of the quarter, AUM was 15% lower than our forecast for average AUM. CSCM came in 13% ahead of our expectations due to a significant increase in Delta neutral trading strategies partially offset by other/FX. Higher revenues resulted in an EBITDA beat, partially offset by higher admin costs.

The US SEC recently approved spot Ethereum ETFs, following the footsteps of Bitcoin, which the SEC approved in January. Thus further signalling the institutionalisation of crypto in the US. Bitcoin ETFs have attracted net inflows of USD17bn YTD, while net inflows for Ethereum were muted, with net outflows of USD0.5bn following Grayscale Ethereum Trust’s (ticker ETHE) conversion from a trust to ETF. Although the UK and Italy are on a regulation pathway, with the London stock exchange listing Ethereum and Bitcoin ETNs for institutional investors, demand in these markets remains muted as current products exclude retail participation.

We make minor revisions to our estimates, resulting in an EBITDA reduction between 4-7% 2025e-2027e following recent price movement in cryptocurrencies, for which we do not make explicit assumptions. Due to lower estimates, we reduce our base case from SEK110 to SEK105 and our bull case from SEK150 to SEK135. We raise our bear case from SEK45 to SEK50.