Digital Currency Group (DCG) experienced a significant boost in revenue during the first quarter of 2024, thanks to the resurgence of the cryptocurrency markets. In a letter to shareholders, the crypto behemoth announced a staggering 51% year-over-year increase in revenue, totaling $229 million.
Despite facing a considerable outflow of $17.4 billion from its Bitcoin fund since it transitioned into an exchange-traded fund (ETF) in January, Grayscale managed to maintain stable revenue throughout the quarter. The asset manager offset the losses in assets under management by generating $156 million in revenue, driven by higher asset values.
Grayscale’s outflows can be attributed to the intensifying competition among Bitcoin ETF issuers, who offer lower management fees compared to the 1.5% charged by Grayscale’s Bitcoin Trust (GBTC). For instance, the Bitwise Bitcoin ETF (BITB) charges a mere 0.2% in management costs. Despite anticipating outflows due to increased competition in the ETF sector, Grayscale’s Q1 revenue from GBTC exceeded expectations, as confirmed by Digital Currency Group.
DCG’s other companies also experienced revenue growth throughout the quarter. Foundry, a crypto mining pool, witnessed a 35% increase in revenue, reaching $51 million, thanks to staking services and equipment sales. Luno, on the other hand, saw a surge of 46% in income, totaling $16 million, driven by increased trading volumes.
However, regulatory challenges in the US have been a significant hurdle for the giant. The New York Attorney General (NYAG) recently escalated its fraud lawsuit against DCG, CEO Barry Silbert, and former Genesis Global Capital CEO Soichiro Moro, seeking $3 billion in damages.
In other news, the parallel market movements and future potential of Shiba Inu and Bitcoin are currently being closely monitored by investors. 
