Despite GBTC’s exits, the digital currency group’s first-quarter revenue rose 51 percent.
Digital Currency Group (DGG) has seen revenue rise in the first quarter of 2024, driven by a recovery in crypto markets.
The crypto conglomerate's revenue rose 51 percent year over year to $229 million, the company reported in a letter to shareholders.
Greyscale's revenue was flat for the quarter, despite $17.4 billion in withdrawals from its Bitcoin fund since converting to an exchange-traded fund (ETF) in January. The asset manager generated $156 million in revenue due to asset value appreciation, offsetting losses on assets under management.
Grayscale has emerged from growing competition among Bitcoin ETF issuers that offer low management fees. The Greyscale Bitcoin Trust (GBTC) charges 1.5% in management fees, while other funds such as the Bitwise Bitcoin ETF (BITB) charge 0.2%.
In the letter, Digital Currency Group said, “Greyscale is expected to exit in line with the ETF wrap competition, but Q1 earnings in GBTC exceeded our expectations.” YCharts data shows that GBTC's assets under management are over $18.1 billion as of May 9.
Other businesses under the DCG umbrella also posted revenue growth during the quarter. Crypto mining pool Foundry revenue rose 35% to $51 million, driven by increased sales of services and equipment. Investment platform Luno saw revenue rise 46 percent to $16 million.
The corporation has been facing regulatory challenges in the United States. The New York Attorney General's Office (NYAG) recently expanded a $3 billion fraud suit against DCG, its CEO Barry Silbert, and Genesis Global Capital's former CEO Soichiro Moro.
The NYAG accuses the companies of defrauding more than 230,000 investors of more than $1 billion in the Gemini Income program. According to the original complaint, the suit seeks to enjoin Gemini, Genesis and DCGG from operating in New York and to recover investment losses.
Magazine: 1 in 6 new Base meme coins are scams, 91% vulnerability
