CSHR — H1 2026 Financial Report Analysis

CoinShares, a Jersey-based firm that runs exchange-traded products tracking bitcoin and other digital assets, swung to a net loss of $23.9 million in the first half of 2026 from a $77.6 million profit a year earlier. Revenue fell 35.7% to $51.4 million. Most of the drop has one cause: bitcoin fell about 31.8% over the six months and ether about 47.5%. CoinShares earns most of its money as a percentage of client assets, so lower prices meant lower fees. The loss itself is mostly accounting marks and one-time listing costs, not the business losing money to run. This is the company's first half-year report since it listed on Nasdaq on March 31, 2026, through a merger with the blank-check company Vine Hill Capital. Like many foreign issuers it reports every six months, not every quarter.

At a glance

• $5.52 billion of client assets at June 30, down 25.2% from $7.40 billion at the start of the year. Clients added a net $27.6 million, so the fall came from prices, not from clients withdrawing money.
• $21.6 million of Segment EBITDA, management's measure of operating profit (it excludes price marks, stock pay and one-offs), was 42% of revenue, down from $59.0 million.
• $32.0 million of the result came from two unrealized price marks: a $16.6 million "XBT Pricing Differential" loss and a $15.4 million loss on the firm's own bitcoin, ether and solana. Without them, pre-tax income would have been about $8.3 million instead of a $23.6 million loss.

The numbers

"n/m" means not meaningful, because the result switched from profit to loss. The year-ago operating margin of 94.9% is distorted the other way. Under U.S. accounting rules, CoinShares counts gains and losses on the crypto it holds for its products in operating income, and in H1 2025 those swung in its favour.

Where the revenue went

Asset management is the core business. CoinShares issues listed products, mostly in Europe, that hold bitcoin and other coins for investors, and it charges an annual fee on the assets. Management fees fell 32.9% to $40.0 million. The breakdown in note 3 shows where:

Fees are shrinking on two levels. Lower coin prices cut every product's fee base. On top of that, money is moving from expensive products to cheaper ones. The legacy XBT Provider notes still produced 69% of management fees, but clients took $104.6 million out of them during the half. The newer CoinShares Physical range took in $155.9 million, according to the company close to 15% of all net inflows into European crypto ETPs. Physical products generally charge less than XBT notes, and in February CoinShares cut the fee on its flagship physical bitcoin product from 0.25% to 0.15% a year. Block Index tracks blockchain-related company shares and charges 0.325%. It rose 17.0% to $1.56 billion while coin prices fell, which helped assets but also lowered the average fee. Management says the lower blended fee rate "primarily reflects product mix rather than broad-based fee compression." That is true, but the mix keeps moving in the same direction, so the average fee should keep slipping even if prices recover.

Capital markets uses the firm's own balance sheet for staking, lending and trading. Revenue was $11.4 million and trading gains another $3.4 million. Including those gains, the segment brought in $14.9 million, down 43.9% from $26.5 million. Segment EBITDA fell from $21.3 million to $7.1 million. Staking pays rewards in coins, and the ether price fall alone cut their dollar value. Management also chose to lend out less capital "in line with the Group's risk appetite," and trading opportunities dried up. (The segment table shows $22.1 million of H1 2025 segment revenue. The $20.3 million used above is the consolidated figure after $1.8 million of internal eliminations.)

What the headline numbers hide

• Most of the loss is price marks, not operations. The XBT Pricing Differential is an accounting gap. CoinShares values its XBT note liabilities at their market price and the coins it holds against them at the coin price. When the notes trade at a discount or premium to the coins, an unrealized gain or loss appears even though the firm's actual exposure "has not materially changed." It cost $16.6 million this half after adding $18.1 million a year ago. The $15.4 million treasury loss is real price risk: the firm keeps a small stock of BTC, ETH and SOL on purpose and plans to hold it long term. Together the two cost $32.0 million this half. A year ago they added $23.7 million to profit, so the comparison looks worse than the underlying change in the business. After June the treasury loss for the year so far shrank to about $3.6 million by August 31 as prices recovered. That is outside this period and could reverse again.
• One-time costs from the listing. A $6.1 million stock-pay charge came from settling an old share option plan ahead of the listing (part of it paid out in $18.1 million of cash). Professional fees nearly tripled to $7.9 million, with $4.9 million of that tied to the Nasdaq listing and the switch to U.S. accounting. Excluding both price marks and the option charge, pre-tax income would have been about $14.4 million. Some of the higher cost will stay, though: running a U.S.-listed company costs more every year, and management only calls these costs non-recurring "at the level incurred."
• Fees are mostly not cash when earned. $33.2 million of the $40.0 million in management fees was non-cash when booked. XBT Provider fees stay inside the products' coin holdings until investors redeem their notes. The firm counts $284.6 million of these earned but uncollected fees in its $413.9 million "available capital." Management says they are fixed in dollar terms and not exposed to coin prices. Even so, more than two-thirds of the company's stated spare capital is money it has earned but not yet collected in cash.
• Cash flow is weak, and so is its usefulness here. Operating cash flow was $12.4 million, down from $112.5 million. In this business, operating cash flow mostly moves with coins bought and sold and with note redemptions, so it says little about earnings quality. What it does show is that cash on hand fell from $64.2 million to $47.1 million. The company repaid its $28.8 million Reyl loan, paid a $21.5 million dividend and spent $18.1 million settling options. It received $25.8 million from the merger.
• More shares. Diluted average shares rose 5.7% to 133.3 million after the listing, so each share has a smaller claim on the same earnings.
• No guidance. Management gave no revenue or profit forecast, so there is nothing to compare against an earlier outlook.

Takeaway: The $23.9 million loss mostly reflects crypto prices: $32 million of paper marks and about $11 million of listing-related costs. What deserves more attention is slower and permanent: the high-fee XBT notes that still produce two-thirds of fees are losing clients to cheaper products, so CoinShares needs more assets just to keep fee income steady at any given bitcoin price.

What to watch next

This business moves with coin prices in both directions. Most costs are fixed, so a price recovery passes through to profit quickly, and that is already showing. By August 31 client assets had climbed back to about $6.93 billion, about 25% above the June level, and most of the treasury loss had reversed. If prices hold, the second half should look much better on reported figures. The listing costs and the option-plan charge should also not repeat in the same size. The questions for the full-year report are structural ones. Can Physical inflows grow fast enough to offset fees lost as XBT notes are redeemed? Will capital markets income recover once the firm puts more capital back to work? And how will the Board use the share buyback authority it asked shareholders for at the September 15 meeting, alongside the Bastion acquisition completed in early September? We would judge the business mostly on two figures, fee revenue per dollar of client assets and Segment EBITDA, rather than on reported net income, which will keep moving with bitcoin.