K33 Ab · OMXSTO:K33
K33 Ab — Arcane Crypto — Q2 2021 Earnings Presentation
35 slides from K33 Ab's earnings presentation, Aug 13, 2021
Slide 1: Arcane Crypto Q2 results
Arcane Crypto Company presentation in relation to Q2 results August 13th 2021
Slide 2: Disclaimer
Disclaimer This presentation is not for public release or for release, publication or distribution (in whole or in part) in or into the United This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results States, Canada, Hong Kon
Slide 3: Arcane Crypto – Summary
Arcane Crypto – Summary • Institutional demand is growing rapidly. As an example, both volume and open interest for bitcoin contracts on CME increased more than 10x in 2020 High growth market • In addition, there seems to be an emerging trend where companies add BTC exposure to their balance sheet •
Slide 4: Table of contents
Table of contents Chapter 1 Q2 update Chapter 2 Crypto sector Chapter 3 Introduction to Arcane Chapter 4 Key figures and a look at the portfolio 4
Slide 5: Q2 update
Q2 update 2> kaupang trijo pSpite MY Arcane Crypto © teslacoil
Slide 6: A record quarter for Arcane
A record quarter for Arcane ” Q2 has been a great quarter for Arcane Crypto on many fronts as we continue to deliver on our core strategy, to develop and invest in projects focused on bitcoin and digital assets. Our revenue saw strong growth and exceeded 100 MSEK in the quarter, with a gross margin
Slide 7: Main events
Main events Main events during Q2 2021 After the end of the period • On 2nd July, Arcane Crypto completed the acquisition of Trijo. • On 2nd April, BlockFi and Arcane Research announced a collaborative partnership to provide a • On 21st July, Pure Digital announced that Bank of New York Mellon has j
Slide 8: The sector continues to grow despite volatility
The sector continues to grow despite volatility • Despite volatility, the cryptocurrency market continued to mature during Q2. $1.2 trillion ATH market capitalization of bitcoin • Bitcoin reached a new all-time high, with a market capitalization of 1.2 trillion USD. • Fidelity’s inaugural institutio
Slide 9: Pure Digital, digital assets trading for Tier 1 banks
Pure Digital, digital assets trading for Tier 1 banks • During the quarter Bank of New York Mellon, announced its involvement with the Pure Digital • They are joining State Street and 4 other tier Undisclosed one banks, that have yet to be disclosed, exploring the possibilities of a bitcoin interban
Slide 10: LN Markets benefiting from accelerated lightning adoption
LN Markets benefiting from accelerated lightning adoption Gross trading volume kSEK on LN Markets • On 16th April 2021, Arcane Crypto entered into an investment 800 000 agreement to increase its ownership in LN Markets from 7% to 700 000 around 16% 600 000 • LN Markets is a trading platform built on
Slide 11: Arcane is expanding into mining
Arcane is expanding into mining • On 28th June 2021, Arcane Green Data Services AS entered into a lease agreement for hosting capacity for bitcoin miners of up to 2.5 MW. • Arcane Green Data is in the process of negotiating the acquisition of mining equipment, financing for such equipment, as well a
Slide 12: The fund has weathered the storm, next up is distribution
The fund has weathered the storm, next up is distribution AUM end of quarter kSEK • Since launch, a little over a year ago, the Fund managed by Arcane Assets has 180 000 outperformed both bitcoin and other cryptocurrency hedge funds. 160 000 • Now that we have proven our ability to deliver value to
Slide 13: Arcane Research continues to expand
Arcane Research continues to expand Arcane Research has tripled its revenue from Q1 Number of subscribers for market update 2021 to Q2 2021, has secured new clients and 4000 has built on existing relationships, most notably: 3500 • Published 37-page industry report with LMAX Digital, on the Bitcoin
Slide 14: Full ownership secured, time to consolidate and scale
Full ownership secured, time to consolidate and scale Gross trading volume kSEK • Arcane have now taken full control of both the Norwegian cryptocurrency broker 140 000 Kaupang Krypto AS and the Swedish 120 000 exchange Trijo (Ijort Invest AB). • During the quarter, Kaupang launched a 100 000 premiu
Slide 15: Key figures for Arcane Crypto
Key figures for Arcane Crypto Financial overview (excluding result from associated companies) • Arcane had kSEK 100,372 in revenue in Q2 2021 compared to kSEK kSEK Q2 2021 Q1 2021 2020 2,157 in Q1 2021 • Illustrative Gross Profit on Sales increased to kSEK 5,537 in Q2 from Revenue 100,372 2,157 2,10
Slide 16: Key figures for Arcane Crypto
Key figures for Arcane Crypto Group Revenue (kSEK ) Illustrative Gross Margin on Sales* (kSEK ) 120 000 6 000 100 000 5 000 80 000 4 000 60 000 3 000 40 000 2 000 20 000 1 000 0 0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 • Only Kaupang Krypto, Arcane Assets and
Slide 17: Crypto sector
Crypto sector © teslacoil GRR cisss, kaupang trijo naplte A Arcane Crypto
Slide 18: A maturing market
A maturing and market 1. Large institutions 2. Already a billion- coming in dollar market 3. The technology is 4. Cryptocurrencies are improving fast becoming regulated 18 12/08/2021
Slide 19: Continued adoption despite volatility
Continued adoption despite volatility The big banks are coming • BNY Mellon will roll out digital asset custody in 2021 and now exploring crypto trading along with State Street Real BTC Volume ($ million) 7-Day Average 18 000 • Goldman Sachs relaunched its cryptocurrency desk • Morgan Stanley starte
Slide 20: Disrupting payments, a trillion dollar opportunity
Disrupting payments, a trillion dollar opportunity Bitcoin is ideal as a cross- border payment rail: A global layer of interoperability: 20
Slide 21: Huge market opportunity in global payments
Huge market opportunity in global payments Global Payments Revenue Global and digital services need 2,7 global payment rails 2,5 2 1,9 1,8 USD trillion 1,6 Global aviation Global remittances 1,5 1,3 1,4 USD +800bn USD +500bn 1 1 0,5 Global gaming Global media 0 2009 2011 2013 2015 2017 2018 2023F US
Slide 22: Introduction to Arcane
Introduction to Arcane Arcane Crypto
Slide 23: Vision and Mission
Vision Become the leading full service digital finance platform in Europe Mission Leverage digital currencies to revolutionize payments 23
Slide 24: Creating a crypto powerhouse
Creating a crypto powerhouse In three years, Arcane has grown to a Nasdaq listed group of 8 companies through extensive M&A and organic development Global digital Buy and build finance platform going-forward 2018 2019 2020 2021 2022 24
Slide 25: Volume driven and scalable business models
Volume driven and scalable business models The main source of revenue: • Percentage fees on payment volume • Spread and/or fees on trading volume Payments technology Asset management Interbank market Borker Percentage fee on payment Management fee (% of AUM) and Brokerage fee as percent of Spread on
Slide 26: Arcane digital finance platform
Arcane digital Asset Management A cryptocurrency hedge fund for professional finance platform investors B2C B2B Payments Trading Platforms Regulated crypto exchange in Sweden, a Offering our Teslacoil payment as a * Norwegian regulated broker and derivatives software-as-a-service worldwide trading p
Slide 27: 2025 potential – Arcane Crypto Group
2025 potential – Arcane Crypto Group 2025 potential Comment “Unlimited” target market comprised of global payments, Processed volume (yearly) SEK 55bn retail and institutional trading and execution platforms Asset under SEK 10bn “Unlimited” target market” – global crypto asset management management
Slide 28: Key figures and a look at the portfolio
Key figures and a look at the portfolio
Slide 29: Pure Digital (37.5%)
Pure Digital (37.5%) Pure Digital will provide a best-in-class primary wholesale marketplace, with a consortium of banks as liquidity providers, custodians, and clearers. • During the period Puremarkets announced that it had signed a letter of intent with the Bank of New York Mellon. • The team has
Slide 30: LN Markets (16%)
LN Markets (16%) LN Markets is a trading platform built on the Bitcoin Gross trading volume kSEK on LN Markets Lightning Network and uses Bitcoin, paid and settled over the Network as collateral for derivatives trading. 900 000 800 000 • th On 16 April 2021, Arcane entered into an agreement to incre
Slide 31: Arcane Assets (100%) Arcane Research (100%)
Arcane Assets (100%) Arcane Research (100%) Assets under management (KSEK) • Arcane Research has more than doubled its 180 000 revenue from Q4 2020 to Q1 2021 and has • Arcane Assets manages the Fund, which has reached Assets Under secured several new clients Management (AUM) of just below USD 160 0
Slide 32: Arcane Green Data (100%) Alphaplate (45%)
Arcane Green Data (100%) Alphaplate (45%) • Arcane Green Data is a new business unit, currently under development which will focus on Arcane’s mining strategy. • During the first quarter of 2021, Arcane held 45% of Alphaplate and this remained unchanged during the period. • On 28th June 2021, Arcane
Slide 33: Kaupang (100%) and Trijo (100%)
Kaupang (100%) and Trijo (100%) Background Gross trading volume kSEK • th On 26 of March 2021, Arcane closed the Acquisition of Kaupang Krypto • On 20th of April 2021, Arcane entered into an agreement to acquire the remaining 140 000 outstanding shares in Trijo 120 000 Operation updates for Q2 • Tri
Slide 34: Integration of Arcane Technology and Teslacoil (100%)
Integration of Arcane Technology and Teslacoil (100%) • During Q2 the focus has been on integrating Telsacoil with Kaupang Krypto. Kaupang already leverages the software to offer instant bitcoin payments as an option for a couple of merchants, serving as pilot customers. • During the quarter, the Li
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