DCG - Parent Company to CoinDesk registers loss of $1.1Billion in 2022

[Flexystar]

In a surprising news that I read today, DCG which is Digital Currency Group, a conglomerate in the world of crypto space has declared that they have lost around $1.1 billion from their investments, loans and lending platform named as Genesis. This happened after the report of 2022 came out.

DCG who was funding their own project Genesis, for the purpose of restructuring it they lost much of the value over there. They also stated that, Bitcoin's continuous decline was one of the prime reason behind this.

Though DCG's books declared the total capital of $5 billion plus on the companies balance sheet, it was hard to digest that only $267 million were in cash flow, rest of the money is either invested, or in the form of tokens, Grayscale trust shares and much more.

Notably, last year was very bad for various big and small organization. Does it going to be worst in the crypto space or will it be all over soon?

Cryptocurrency conglomerate Digital Currency Group (DCG) reported a loss of $1.1 billion last year as the firm struggled with plunging crypto prices and the restructuring of its lending platform, Genesis.

“In addition to the negative impact of [bitcoin] and crypto asset price declines, last year’s results reflect the impact of the Three Arrows Capital (TAC) default upon Genesis,” DCG said in its fourth-quarter investor report.
DCG is the parent company of CoinDesk.

From a consolidated balance sheet perspective, DCG held total assets of $5.3 billion as of Dec. 31, 2022, the report said. This included cash and cash equivalents of just $262 million. Investment assets, including tokens, Grayscale trust shares, venture and fund investments amounted to $670 million. The remaining assets consist mostly of assets held by divisions Grayscale and Foundry, according to DCG.

A DCG spokeswoman said all the investment assets and the value of the venture portfolio have been marked to market.

DCG’s Q4 revenues were $143 million, with losses of $24 million. Consolidated revenues for the full year were $719 million.
In its annual independent stock valuation, DCG had an equity valuation of $2.2 billion, or a price per share of $27.93. “This appraisal is generally consistent with the sector’s 75%-85% decline in equity values over the same period,” the report said.
Despite the challenges of last year, DCG said it had “hit a milestone” regarding the restructuring of Genesis, pointing to a nonbinding term sheet agreement involving some of the main creditors.

The agreement involves extending the maturity of DCG’s May 2023 obligations to Genesis Capital of approximately $600 million (at current market prices) to June 2024. Also included is the restructuring DCG’s infamous $1.1 billion promissory note, due in 2032, in exchange for the issuance to Genesis Capital creditors of a new class of DCG redeemable, convertible preferred stock.
Negotiating definitive transaction documents and soliciting votes on a reorganization plan is expected to take several months, said the report.

Crypto Conglomerate Digital Currency Group Reports Loss of $1.1B in ‘Challenging’ 2022

[jackg]

Only losing about 20% of their balance sheet doesn't actually sound too bad compared to how everyone performed in that year. I wonder if it gets worse for 2022 though too...

BTC is a quarter of the price it was at the peak so the fact so much investment value has been retained even though crypto value has fallen does show they've done well at something (either not over leveraging or keeping themselves diversified and getting a bit lucky). They do have a lot of insight though from owning one of the largest crypto news sites.

I think it'll be fairly normal to see huge amounts of money flowing into different random investments from these sorts of companies and some doing well and accounting for the losses that are made by the majority of their investments. Ie they may have parts of their portfolios completely exposed to the risk cryptos and defi brings while trying to maintain the rest of their balance sheet.

[slapper]

OMG! Even bigwigs can't escape the crypto market's volatility. Losing $1.1 billion is a lot, but it could have been worse. They've held onto a lot of their investment worth despite the market conditions in the past year.

Bitcoin's collapse explains the loss. The crypto market is extremely interrelated, so when one coin falls, the rest usually follow. How DCG maintained so much value during the slump intrigues me. Their diversification plan or luck?

Futures are unknown. Cryptocurrencies are continuously developing. The market may worsen before it improves, but I'm optimistic. DCG and others must navigate the rough waters and win.

[slaman29]

A lot, but considering that bigger names have folded completely (FTX being the biggest example) I actually see this as positive news.

I remember in 2018 after the big ATH, huge companies in crypto were reporting quarterly losses of 10-20%, yearly almost 70-80% of losses of capital value.

This meant all their money was in crypto and shitcoins in general.

If you only lose 10% in a bear, it's actually pretty good news?

[sana54210]

Notably, last year was very bad for various big and small organization. Does it going to be worst in the crypto space or will it be all over soon?

I would guess so, after all they are in the crypto world and 2022 was a very bloody year for all of us. I have lost some money too, well technically haven't lost it, it's there, as long as the price recovers eventually but we all did. Only people who made profit during 2022 were the people who shorted at the right times, hell even some of them lost money if they shorted at the right times.

So all in all, this 1.1 billion is normal for a company that size, they have huge operational costs too, and they are lucky to be not bankrupted at this point. Best thing to do would be keeping it live as much as they can and make a profit when the price goes up again.

[stompix]

Only losing about 20% of their balance sheet doesn't actually sound too bad compared to how everyone performed in that year. I wonder if it gets worse for 2022 though too...

Depends on what the balance sheet is made of

DCG reportedly held total assets of $5.3 billion with cash and liquid holdings of $262 million and investment assets of just $670 million as of 31 December, 2022. The remaining assets consist mostly of assets held by divisions Grayscale and Foundry, according to DCG.

but, how much of the rest are in Genesis assets that now belong as well as the debt to DCG ? The 1.2 billion lost over 3AC, combined with sec inquiries into their business, the selling of Grasyscale shares by DCG at a discount, it's worse than the 20% might sound.

They are running out of cash and the only thing that is right now bringing in money, Foundry, is not really having the time of its life with the income miners get nowadays.

[TimeTeller]

Notably, last year was very bad for various big and small organization. Does it going to be worst in the crypto space or will it be all over soon?

I would guess so, after all they are in the crypto world and 2022 was a very bloody year for all of us. I have lost some money too, well technically haven't lost it, it's there, as long as the price recovers eventually but we all did. Only people who made profit during 2022 were the people who shorted at the right times, hell even some of them lost money if they shorted at the right times.

So all in all, this 1.1 billion is normal for a company that size, they have huge operational costs too, and they are lucky to be not bankrupted at this point. Best thing to do would be keeping it live as much as they can and make a profit when the price goes up again.

Yes, if they will shutdown their business now, they won't recover those losses.
That is right, with big company like them, expect that losses will be in millions to billions of dollars.
But with such huge losses, they are still standing, it means, they have more assets to back up their company.
It is only a matter of time before they can recover such loss. But in any case, don't know what they really wanted to convey why they are disclosing such billion losses.