Edison Investment Research Limited : CoinShares International (CS): Initiation - Tech-driven pioneer in digital assets

Edison Investment Research Limited Edison Investment Research Limited: CoinShares International (CS): Initiation - Tech-driven pioneer in digital assets 18-Oct-2021 / 08:00 GMT/BST

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London, UK, 18 October 2021

CoinShares International (CS): Initiation - Tech-driven pioneer in digital assets

CoinShares International (CS) is a fintech business created to support the emergence of digital assets as a new investible asset class. However, it is more than a simple beta play on the bitcoin price, as its proprietary technology facilitates both regulated issuance platforms (with CS's assets under management, AUM, at USUSD6.5bn currently) and gains derived from capital markets activities, including liquidity provisioning, non-directional trading and fixed income activities. Hence, CS benefits from the inherent high volatility of digital assets, and in turn offers a certain level of downside protection in case of adverse digital asset price performance.

In our base case scenario (which assumes no abrupt near-term downturn), we value CS at SEK120.3 per share with a conservative cost of equity at 12%. At a cost of equity of a more traditional financials business (which we estimate at 9%), CS's value would be SEK162.9 per share. Our 'crypto winter 2022' scenario, in which we stress test a bear market in digital assets similar to 2018 and delayed growth in global allocation to crypto, implies a fair value per share of SEK78.4. Click here to view the full report or here to sign up to receive research as it is published.

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October 18, 2021 03:00 ET (07:00 GMT)