CoinShares International Limited

Thank you for standing by and welcome to the CoinShares Q1 earnings broadcast. All participants dialing in are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. You can submit your questions via the postbox below the video on the platform. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host, Jerry Lee Brown. Thank you.

Thank you, operator. I would like to welcome you all to the CoinShares 2024 Q1 earnings call and webcast. Speaking from management today will be John-Marie Magnetti, Chief Executive Officer, and Richard Nash, Chief Financial Officer. All those joining today are encouraged to log into the live event where you'll be able to view the accompanying presentation during today's call. Alternatively, presentation are available to download from the investor relations section of the CoinShares website. A replay of the webcast will be available for 30 days following the live call, and a transcript will be posted on the company's website as soon as it is available. Following the presentation, we will host a short Q&A via the webcast platform. Should you wish to submit a question to the management team, please provide your name and company affiliation. we will do our best to get to as many of these as we can in the allotted time. Lastly, our safe harbour statement. CoinShares would like to remind everyone that, except for historical information contained herein, statements made on today's call and webcast that constitute forward-looking statements are based on currently available information. The company assumes no responsibility to update any such forward-looking statements, and I would like to point you to the risk factors associated with our business, which are detailed in our prospectus. the call over to Jean-Marie.

Good afternoon everyone and thank you for taking the time today to join us and hear about Coinshare activity during Q1 2024, an historical quarter on more than one account. So Q1 2024 is our most successful quarter ever. Q1 2024 is marking a period of unmatched strength and profitability for Coinshares. Richard will give us all details on that soon, and before we delve into the specifics of our Q1 business activities, let's first take a look at the pivotal developments for both the industry and Coinshare during this landmark quarter. In January 2024, the US SEC granted approval for 11 spot Bitcoin ETFs, signaling a significant shift toward integrating digital assets into the mainstream financial markets. This approval is a testament to our longstanding advocacy for the integration of digital assets, which has been part of our vision for over a decade in Europe. It doesn't only reflect the increasing acceptance of digital assets, but also strongly validates Coinshare's initial investment approach, which focuses on the institutional adoption of digital assets and democratizing access to these assets through regulated listed products. In line with our deal calendar, we completed in March 2024 the acquisition of Valkyrie Fund's ETF business. The strategic acquisition includes a few things. First, a registered investment advisor. Second, the sponsor right of a 33-act ETF, a Valkyrie Spot Bitcoin ETF. And third, the sponsor right of a 40-act ETF platform issuing right now three ETFs, one of them being WGMI, a very specialized Bitcoin miner ETF. Coinshares benefited from great timing and execution of this deal. As a reminder, the US ETF journey was started by the Winklevoss brother back in 2014. For Coinshares, as discussed with analysts at the time, we were deliberately not part of the race at the end of Q3 2023 for the lack of the right opportunity. This move in the US is crucial as it aligns with our commitment to becoming a leading global investment company specializing in digital ethics. The integration of our U.S. colleagues will enable us to enhance our operating model across risk, compliance, trading, and distribution, which is vital for our ability to compete on a global stage. Indeed, the U.S. market accounts for 50% of global assets under management and offers unique opportunity for coin share in terms of growth. The pricing panic on December 29th, 2023 among US ETF issuer following some late Friday night Twitter battles posed serious challenges for most US spot Bitcoin ETF issuer. Let me do some quick math here. 25 basis points headline revenue numbers and assuming custody is your main cost, issuer are left with 11 basis points of gross profit at best. That means not much net revenue at all, especially if you need to share that with a co-sponsor. Bottom line, unless you have tens of billions of dollars of AUM in this product line, it is a loss-making one. In this environment, our US spot Bitcoin ETF is positioned to be a doorbuster asset in the US, which we want to operate at breakeven. Our profitability in the US will not come from what we have been doing in Europe for 10 years, that would be way too easy, but from more sophisticated products, highlighting our strategic focus. While competition in the US is fierce, especially for industry giants like BlackRock and Fidelity, we accept that our strategy cannot lie in competing with these well-established entities with massive distribution networks. Instead, our competitive advantage is rooted in our deep expertise in the digital asset space and our hedge fund DNA, which resonate with American investors. Looking forward, we are poised to introduce more actively managed strategies, a cornerstone of our identity, anticipating the evolution of the ETF sector. We do believe that Coinshare, this sector, will increasingly blend the sophistication of hedge funds with the accessibility of regulated listed products such as EPPs. Our dual strengths in financial product structuring and active asset management, coupled with our technical understanding of the digital asset sector, aim to redefine industry standards and position Coinshare at the forefront of innovation in the financial world. Okay, I can see our company secretary telling me with her hands, I need to let our CFO speak. So without further delays, let's take a look at our Q1 financials. And I'm glad to be joined by Richard Nash to present these results. Richard, over to you.

Thanks, Jean-Marie. So as one would expect, given the price movements and the overall activity in the market since the start of the year, we have had a very strong three months across all aspects of the business. The group's adjusted EBITDA for the period has landed at £34.2 million, which is our strongest ever quarter. Obviously, this has been largely due to the price action experience thus far in 2024, but we're happy to report that as the group continues to grow and evolve, the top-line performance is becoming increasingly diversified, with less reliance being placed on our legacy products as time moves on. Of our total revenue gains and other income, around 45% comes from our asset management business, around 40% from capital markets, and then the remaining 15% for Q1 comes from our principal investment portfolio. The balance between the two main parts of the business, asset management and capital markets, is consistent with what we have experienced historically. Both business units, of course, thrive when the market is rallying and they are both posted around 50% of 2023's entire performance in a single quarter. Additionally, we are still heavily focused on keeping control over our cost base to allow such market rallies to impact our bottom line as much as they possibly can. And we are also therefore happy to report an adjusted EBITDA margin for the quarter of 78%. This margin is starting to return to levels we experienced back in 2021. and we will continue to do all we can to try and maintain these levels while improving the infrastructure of the wider group. Moving down to total comprehensive income, which this quarter is largely equivalent to EBITDA, we have generated a total of £34.1 million, and this translates into an adjusted earning per share of 50 pence over the three-month period to March. While the quarter has been remarkable insofar as it is our best ever quarterly financial result, it has actually been rather unremarkable in other regards. And it's business as usual, a stable cost base and steady diversification of top line in a scalable manner that allows us to reap the benefits of positive movements in the market. So now looking a little bit more closely at our asset management platform. And as a reminder, the components of this business unit, as at the end of 2023 or XPT provider, our coin shares physical ETPs and the coin shares blockchain global equity index or block index. This has now been expanded upon following the successful acquisition of Valkyrie funds, LLC, as we announced in the middle of March. While our financials for Q1 only reflect around two weeks of management fees from these products, as JM has already made a reference to earlier in this presentation, this is a very significant step forward for the group for a variety of reasons. The story within asset management is very consistent with that of the overall group for Q1. Its performance is a reflection of the movements in the wider market, coupled with cost control and solid margins. And as can be seen from the table here, the overall gross profit margin of the group's asset management platform remains very healthy and very stable. The management fees of the quarter of £19.5 million are the group's second highest on record, just behind Q4 2021, but now we're seeing more diversification than ever, with CSDS becoming a larger proportion of overall fees each and every quarter. Q1 for CSDS is already in excess of 2023 in its entirety. A core driver for this performance, in addition to the usual drivers of flow and of price, was the introduction of staking capabilities on the CoinShares physical Ethereum product, which has brought a material benefit to both CoinShares and note holders alike. This has more than offset any reduction in fees arising from the decision to reduce the management fee on CS Physical Bitcoin from 98 pips to 35 pips. And this quarter that we've seen is hopefully an indicator of the rest of the year to come for CS Physical. Combination of flow and price movements has resulted in CoinChase Physical AUM increasing by 64% in the quarter from 567 million to 932 million. XPT, meanwhile, opened the year at an AUM of approximately 1.87 billion and closed the quarter with 2.89 billion. So this AUM growth, coupled with the Valkyrie acquisition and the block index performance for the quarter, which is also strong at 400k of fees, brings the total group AUM as of the end of Q1 2024 to 4.77 billion pounds. As I always like to remind everyone, the flows for our ETP product suites and those of all our key competitors is published in our weekly digital funds flow report, which is available on our website. And additionally, the level of AUM held within each of our products is disclosed and subject to daily attestation by Ledger Lens, an independent firm solution, which is embedded into our website designed to provide additional transparency and comfort to all our stakeholders. and over the coming quarter or so, we will look to integrate this solution with our newly acquired products within the Valkyrie Fund's product suite. Moving on to capital markets, the performance of the capital markets business unit in Q1 continues to demonstrate the benefit that diversification of activities can bring, resulting in total income and gains for the quarter of 17.3 million pounds. The business unit's performance has brought with it a solid gross profit margin for the quarter of 90%. Trend that has been consistently improving since the end of 2022 due to changes that we made internally to our infrastructure. Liquidity provisioning of 2.8 million pounds arising from supporting the group's XPT provider products have already exceeded 2023 in its entirety due to the high level of flows we've experienced on the products following the price rally of Q1. Delta neutral trading strategies of 0.6 million pounds are a little bit down on last year, although we expect these to pick up during Q2 following a range of strategies deployed towards the end of Q1, which we expect to perform well and have already seen some benefit from moving into Q2. Fixed income activities have started the year strong with our digital asset lending and the resulting yield increasing markedly over the quarter due to the price appreciation driving up the USD value of the digital asset denominated lending, generating solid yields from a small number of select lending counterparties. The main driver for the business unit, however, remains consistent with that of previous quarters, which is our staking income. The total value of staking yield generated over the first quarter of the year amounts to approximately 5.9 million pounds, which is over 50% of the overall capital market's performance. And finally, the other gain in the quarter is driven by an FX gain from hedging activities undertaken with brokers being partially offset by losses associated with the performance of the group's ECO, BCO funds, which represent the group's first products within its hedge fund solutions product suite. So while I provide some closing comments, we can just take a look at the quarterly performance of the group since the start of 2021, which we always do to help visualize the quarter in context. So as already stated, we have had our best quarter on record, both in terms of top-line performance and adjusted EBITDA. We've got strong margins across the board, evidencing the scalability of our business model, and we see Q1 as an excellent stepping stone for the remainder of the year. And just a couple of things to note that we haven't touched upon yet. So firstly, we're very happy to announce that following the adoption of the new dividend policy for the group, our first dividend payment to shareholders has now been made earlier this month with the second payment due at the end of Q2. Secondly, post quarter end, we disposed of our holding in 3IQ at the price that was equivalent to our carrying value as at year end. And we generated a gain of approximately 2.3 million pounds when compared to the initial cost price. And finally, just a point on our FTX claim. So as you may remember, we took a material hit in 2022 regarding our assets held on FTX. And despite receiving multiple offers for our claim, we elected to hold onto it. And we are encouraged by the recent announcements in the market regarding the likelihood of recovery. While we are yet to recognize any of these amounts, our claim stands at approximately 27 million pounds. If recovered, this will result in a direct gain to the consolidated P&L of the group and a significant boost to our financial performance. Further details of everything I've touched upon here are available in the Q1 report, which I encourage everyone to please take a closer look at. And now I will hand back over to Jean-Marie.

So, asset management. The first quarter of 2024 in the crypto ETP market was largely defined by the significant impact of the US spot Bitcoin ETF launches and a sustainable market in crypto assets. Notably, the asset accumulation of US products exceeded expectations. The standout product iBit gathered an impressive 12 billion of AUM, while even the fourth best performing spot Bitcoin ETF accrued over a billion of inflow. Also, a considerable portion of this asset likely shifted from substantial outflows from Grayscale flagship products. The net new flows into the US BTC ETF total nearly $10 billion for Q1. The introduction of major market players into the crypto product space, coupled with substantial interest from US investors, marked a new phase in global crypto ETPs characterized by intensified competition and a broader range of choices. In response to this evolving market landscape, we reduced the fees of our Coinshare physical Bitcoin to 35 basis points in Europe. Despite facing substantial net outflow from BITC in Q1, totaling $51 million, and that's attributed to hedge funds closing the spread position and capitalizing on the US fee holidays, Coinshare Digital Securities experienced net inflow into all other products, amounting to $35.7 million. Ethereum, Solana, and Polkadot represented half of these net flows. When compared to competitors, CSDS maintained a leading position, ranking first or second in flows for 12 out of the 15 investment exposures offered on the platform. XBT provider remained a cornerstone of CoinShares asset base and businesses, concluding Q1 2024 with $3.6 billion in assets. As Bitcoin hit new all-time high and the broader crypto market began a bull market phase, investors across various segments started to realize profit, leading to approximately 6.5% of overall assets being withdrawn in outflows. These flows remained steady into the March price peak, with a noticeable increase in de-risking as Bitcoin price declined from the all-time high. This trend is mild and encouraging when compared to Q1 2021, where we observed a loss of AUM of about $400 million versus $240 million in Q1 2024. We anticipate continued net outflow from the XBT platform if the crypto bull market persists. As the majority of the XBT investor base holds substantial investor gains, it will likely continue. However, price acceleration during such a bull run should offset this outflow in terms of dollar AUM. The investor commitment to the long-term performance of Bitcoin and Ethereum remained strong, with relatively modest profit-taking despite significant price increases. Drawing on our team experience with gold products at ETF Securities, we note when normalized for volatility of the underlying, outflows in crypto products are much less severe than the one an issuer can experience in the gold market, for instance. CurrentShares is actively engaging with regulators and listing venues to enhance access for European investors to the safety and convenience of crypto investing within ETPs. We are cautiously optimistic about forthcoming regulatory developments, particularly in the UK and Italy, which will continue to shape the investment landscape in the upcoming months. During the first quarter of 2024, our newly launched American product platform witnessed substantial growth, marked by healthy inflows. Notably, despite the volatile performance of Bitcoin miners this year compared to 2023, our pure-play Bitcoin mining ETF successfully attracted significant investors' interest. This ETF amassed another $40 million of net inflow in Q1 without any dedicated marketing budget, underscoring the intrinsic appeal and market confidence in this product. On January 10th, Valkyrie Digital Asset LLC introduced its Spot Bitcoin ETF, following our acquisition of sponsorship right with Valkyrie Investment in March 2024. This product has distinguished itself by maintaining competitive advantage in terms of fees, liquidity, and slippage. By the close of Q1, it has achieved a remarkable $452.5 million in net inflows. Our strategic objective for VCTF is to provide a highly liquid and cost-effective Bitcoin investment option. Our focus remains on ensuring this product operates cost-neutrally to avoid engaging in a loss leader pricing competition. Later in the quarter, Valkyrie Fund unveiled a new ETF designed to offer investors 2x leverage return on daily Bitcoin future prices. This innovative approach has garnered 44.6 million net inflows by the end of Q1. As the cryptocurrency market maintains its upward trajectory and as we continue to enhance our operational integration and brand recognition in the US, we anticipate growing investor interest in this affordably priced leveraged strategy ETF. So let's look at our capital market and natural solution activity. So let's start with our capital market division, which experienced a strong quarter, benefiting significantly from the increased trading volume triggered by the launch of both Bitcoin ETF in the US. This period of intensified activity was further amplified by increased market volatility, particularly noticeable in March, which supported our liquidity provisioning activities. Additionally, our staking activity has continued to generate consistent revenue. Our lending book remained well diversified and stable, extending across a variety of non-crypto-native counterparties. This diversification plays a crucial role in our ability to manage risk effectively and maintain stability amidst market fluctuation. In response to the highly volatile market conditions, our team has intensified its focus on risk management and more particularly on counterparty risk management. This involves more frequent oversight of counterparty's exposure and various risk limits. It also involves reassessing some certainty we may have on certain counterparty in a different market environment. A special note of gratitude is extended here to our operation team who have been exceptionally dedicated, working around the clock to ensure that we operate within our designated risk framework. Their commitment has been instrumental in navigating the complexity of the current financial landscape. Meanwhile, the hedge fund solution division has been actively developing new trading strategies whilst adjusting to the new market dynamic introduced by the launch of the spot Bitcoin ETF. Building a solid track record is a gradual process and the division is planning to expand its distribution capabilities in the US over the next quarter. This expansion will enhance our engagement with external LPs, enabling us to keep them well-informed of our development and progresses. The strategic move is aimed at bolstering our position and maintaining momentum in evolving market conditions. All right, time to conclude this review. As outlined in my previous communication, the Board of Directors has sanctioned a new dividend policy for the fiscal year 2023. This policy is a testament to our ongoing growth, strategic acquisition, and ever-widening global footprint, all sustained by consistent profitability. We have committed to rewarding our shareholders with an annual dividend paid quarterly in ARI. The first installment of this dividend was disbursed on the 3rd of May, and we have planned three more record dates throughout the remainder of the year. Completing our most successful qualitative date has filled me with confidence that this year will be the most thriving in our group history. This period has highlighted our capabilities to stimulate growth and achieve robust business outcomes. Over time, we have transformed into an organization that is not only stronger and more focused, but is also experiencing continuous growth. This evolution supports a positive outlook for the future and our ongoing commitment to delivering value to all our stakeholders. This is closing co-chair management Q1 2024 remarks and operator, can you now open the call for questions, please?

Thank you, John-Marie. We've got a number of questions today. The first comes from Kevin DD from HCW. Please describe the loss on the certificate liability. What does it refer to exactly and is it a one-time loss?

Thanks, Kevin. I'll take this one. So the loss on certificate liability, now that's not a one-time loss. That will be in the accounts every single quarter, and it represents the movement, effectively, of the liability owing to note holders of our products. So when we have a large loss on certificate liability, that effectively means the price of digital assets has increased, our AUM has increased, and we effectively owe more to the holders of the ETPs. And that movement will always be offset. by a corresponding increase in our digital asset holdings.

Thank you, Richard. Another one from Kevin. Please offer a little more colour regarding CoinShares position regarding FTX settlement. There are reports suggesting that all money could be returned to investors. How likely do you see this?

Well, I touched upon this a little bit earlier in the presentation. Obviously, it's something we're watching with a very keen eye due to the quantum of our claim. And we have, of course, been approached numerous times over the past year or so with offers to buy our thing, which we've always turned down. And I think that in and of itself provides a little bit of an indication as to what we think the final outcome will be. in regards to timing and the point in time at which we'll recognise that in our accounts, that all remains to be seen. So we're taking a prudent approach in regards to recognising anything, but we're obviously holding on to that claim and hoping we see some kind of benefit over the course of this year, regardless of size.

Thank you very much. One for you, Demaree. How does the product introduction schedule expanding beyond the current investment products look for the US market and how do you intend to leverage Valkyrie's position?

Thanks, Geri. First of all, we already launched two products in Q1, so we're not short of launching products already in 2024. The product expansion is a function of the pipeline we're having, the demand we're receiving as well. We're not in the business of launching, as we saw in Europe, everything and hoping for the best. We want to launch very targeted products in the US. The US market is extremely competitive and has been commoditized by the the launch of the Bitcoin ECF already, so we want to be sure to bring to market stuff which are very complimentary and almost orthogonal to what other people are doing to be able to compete and offer higher-piece products to our clients.

Thank you very much. Another from Kevin. What drove the decision to divert from 3iQ?

Not a lack of love for Fred, for sure, who has done an extraordinary job to exit 3iQ investments from Monex. Monex made an offer for 3iQ, which is difficult to refuse. Monex paid nine times the top line, pretty much. If you compare that to what Coinshare is trading at, it was difficult to say no to such an offer. And also, you know, like the you know, the competition happening in the U.S. was making the Canadian-specific market less attractive to us, so we thought it was the right time to take profit, you know. Bear in mind, an Australian investment is an investment, and an investment at some point needs to be monetized and not just still on the balance sheet as a dead asset, so we made a lot of money on this investment through the investment directly, but also through all the trading opportunities created for us, and we come to the conclusion of the journey. And we're still very good friends with Fred, and Fred is an happy shareholder of CoinShares as well. So we're all in one big boat.

Thank you very much. One last one from Kevin. Please, could you offer a view on Q2 based on what appears to be the best volatile crypto price? Also, what has CoinShares done to develop the business, accumulate AUM in Europe, and now with the Valkyrie acquisition? How are you thinking about expanding Valkyrie's brand into the U.S.? ?

So, okay, it's a long question from Kevin. So let's break that down step by step. So Q2, looking forward statement. Look, we're not really in general giving looking forward statement. We have the way through Q2 already. The public information are there to show you how AUM is comporting on average, you know, average price per asset on our balance sheet is pretty good. So we should be in the same position as what we already saw before. So I'm going to not say much more on the forward-looking statement. When it comes to Europe, our team in Europe is doing a fantastic job to go after the pocket of liquidity, which are not being addressed and which are being often a good solution. And Frank and his team are how to work with that. When it comes to the US, we are dividing up that as we speak. There's a strong integration pipeline being driven on both sides of the Atlantic to make sure that the Valkyrie, or what used to be called Valkyrie, is becoming co-chair and is becoming co-chair with the same kind of rigorous principle and approach to what we do and how we do it, and that will drive the cloud acquisition and AUM acquisitions.

Thank you very much. We've got a few questions from Albert Brooke of AVG. The first one is, there's a significant decrease in the amount due from brokers and a new line of other current assets in the balance sheet. Is this only accounting related or is there a shift in strategy?

I'll say this one. It's no real shift in strategy. It's largely accounting related. Over time, our balances due to and due from brokers will fluctuate depending on movements in the market and what we're looking to do within the capital markets team. So it's not indicative of any change in strategy, no.

Thank you very much. Another from Albert. Is there any Valkyrie AUM that is off balance sheet? Is it affected by the sponsorship split that will change in due to?

I can take the first half of this question. The Valkyrie AUM is all currently off balance sheet. So I think if you look at the beginning of the report, there's a breakdown of our quarter end AUM, which lands at approximately £4.7 billion of AUM. The vast majority of that is on our balance sheet. That's the assets held in respect of hedging XPT provider and collateralising the CSDS products. The AUM in respect of the Block Index and the Valkyrie products is off balance sheet.

Thank you very much. The next one from Albert, the large gain of FX or other in capital markets. Is this related to the hedge fund solutions? And should we consider this as a one-off or some other recurring activity?

So first of all, no, it's not in relation to the hedge fund solutions. The hedging activities undertaken within the capital markets are designed to protect against FX fluctuations between USD and Euro and CETF. Euronset being the currencies in which their VT provider ETPs are issued in. So there will always be a bit of a gain or a loss in relation to that activity in any given quarter. So it's recurring in that regard. So these hedging activities are always being undertaken. I think it's fairly one-off in terms of its quantum this quarter, just due to the the nature of the FX moves between USD and EURUSD that we saw over Q1. So recurring, but kind of one-off in its quantity this time around.

Thank you very much. We've now got a number of questions from Milos Paps at Ellison. The first being, please can you provide any details on the consideration paid for the VAT refunds?

Okay, I'm going to be very careful because our US compliance is certainly on the call, so I'm not going to be slapped after this call. Richard, correct me if I'm wrong, the Q4 2023 report didn't mention any strong consideration in cash going out, not being in Q1, so obviously the cash consideration was kind of like not of very any importance and it is driven by an earn out consideration over the next three years based on the bottom line result of the American activity. So nothing more, nothing less, a very clean deal.

very much. Another from Milos. Has there been any meaningful contribution from lending through DeFi protocols to your CSC and gains income in Q1?

In short, the answer to that is no. The lending activities within capital markets, which manifest on the fixed income activity line, which are approximately 2 million for the quarter, all represent digital asset lending to a very small number of select counterparties. So nothing in relation to the dehybridables for Q1.

Thank you very much.

Actually, to be transparent, we borrow for a week on Compound Abbey.

Thank you. Again, from Lelouch. When staking Ethereum, do you use restaking solutions such as the iGen layer?

So it's a very interesting question, actually, because Harris has become the center of the world when it comes to Web3 and staking and restaking. And we have a long meeting with the team at Kiel around the value proposition around restaking and notably Egan-Layer. The Egan-Layer proposal at $15 billion worth of total log value is a illustration that people don't really learn the lesson from the Luna accident. And as a result, Conchia didn't touch at all even later. So resticking is not something we're exploring right now. We think The door is very wide open to get in, the way out is much narrower, and there is a lot of protocol risk which is not assumed. You are just stacking up protocol risk with very little number of engineers and cryptographers able to understand what's the cybersecurity risk around this contract. So at the moment, it's something we didn't touch, it's something we are something we are looking at, something we are engaging almost as an R&D story, but not at all as a production and revenue contribution, I would say. Thank you very much.

What impact on digital assets industry do you expect from the launch of spot Bitcoin and Ether ETFs in Hong Kong? Shall we assume it will be limited as mainland Chinese investors are unlikely to have access to these products?

No, so it's an interesting point. There's a lot of theory online, and people are making their own assumption on that. With my global advisor time, I spent a decent amount of time in Hong Kong and mainland China. Lewis, which is running our hedge fund solution business, used to be based in Hong Kong for 10 years and working for Segunte. So we think we have a very clear understanding of what's happening. The Hong Kong Connect effectively helped, which will authorize mainland China investors to buy the ETF is effectively a bridge which is existing. The bridge could be activated and require at least six months of trading for the product. So right now, it's not even an option. And even if it was an option, so far, it has not been approved for the Bitcoin Future Packs, which are listed in Hong Kong by Samsung and not really the issue, but there was also CISO. So there was two issuers in Hong Kong who issued ETFs by future, which were not authorized on TradeConnect. So bottom line, the new issuer of the spot Bitcoin in Hong Kong for the retail market on Mainland China shop, the guy reading in the tea leaf, you may want to believe there is a bit of a story there. So far, it's not at that point indicating that, but, you know, it may well open up. in a not too far future, but like the indication right now is like no open.

Thank you very much. The final question then from Milos, what is the near-term potential in terms of inflows to the U.S. Bitcoin spots ETF from major U.S. wealth management platforms and registered investment advisors? Do you think they have already started offering the ETFs or are they still in the product due diligence phase?

So, again, we didn't touch up a pinch of salt to make sure we're not making any mistake with our newly-revealed activity in the U.S. The 13F finding, which are this kind of overview of who did what, over 100 million of AUM in the U.S. on the product is just out, or out by the 15th of May, which was the deadline. There is some interesting names there. interesting but also surprising that there is no bigger name, which shows that a lot of people are still in the agents mode. A lot of the wire house in the US have their own policy around launching new products and want to see some track record of the product before adding them to the platform. So, although vast majority of the allocators and the big wire house were still in the internal educational process, internal approval process to make sure this can be distributed to clients. Some of them already have it for the reverse solicitation only, which means the client needs to ask for it and place an order and the sales team can't sell it. So we're still in the very, very early innings in the U.S. market. And I think Wisconsin Pension Fund announced today that we're a big shareholder in the Bitcoin ETF, or one of them at least. So the names are coming out slowly but surely, but the vast majority is not in touch yet.

Thank you very much. And that brings us to the end of our questions. Thank you, everyone, for joining today.