Sygnum Bank, a Swiss-based crypto bank managing $4.5 billion in client assets, has announced it reached profitability in the first half of 2024, spurred by a dramatic increase in cryptocurrency trading volumes.
In a statement released on July 25, Sygnum detailed its financial performance for the first half of 2024, noting significant growth across various trading metrics:
- Crypto spot trading volumes doubled compared to the same period last year.
- Crypto derivatives trading saw an exponential increase of 500%.
- The volume of loans issued by the bank surged by 360%.
Martin Burgherr, Chief Client Officer at Sygnum, attributed these robust gains primarily to the momentum generated by the approval and launch of spot Bitcoin and Ether exchange-traded funds (ETFs) in the United States. These developments have considerably heightened demand for regulated and trustworthy digital asset exposure, reflecting positively on Sygnum’s operations.
Sygnum’s Crypto-Related Offerings
Sygnum has capitalized on this growing market trend by offering several crypto-related exchange-traded products, including the Sygnum Platform Winners Index ETP. This product portfolio includes major cryptocurrencies such as Bitcoin, Ether, Solana, Cardano, and Polkadot. Additionally, the bank has observed a significant uptick in clients opting to stake their Ether through its staking-as-a-service offering, now accounting for 42% of all Ether held by Sygnum customers.
Sygnum emphasized the unique benefits of its staking services for institutional clients, particularly as these services extend beyond the current ETF frameworks that do not yet accommodate staking yields. Looking forward, Sygnum is strategically positioning itself to expand further into the European market and anticipates full compliance with the European Union’s new Markets in Crypto-Assets Regulation by Q1 2025.
Switzerland and EU Regulatory Environment
Although based in Switzerland, which is not an EU member and hence not directly subject to MiCA regulations, Sygnum operates under a license in Luxembourg, an EU member state. This strategic positioning allows it to navigate and align with broader EU regulatory frameworks effectively.
Sygnum reported that it is now partnered with over 20 business-to-business banks and financial institutions, enabling a significant portion of the Swiss population to engage in crypto trading via their primary banks. This extensive network underpins Sygnum’s robust growth and its ability to attract a substantial institutional and professional investor base, which is approaching 2,000 clients.
Beyond its success in Europe, Sygnum maintains an office in Singapore and has plans to extend its regulated services into the Asia-Pacific region, including Hong Kong, in the upcoming months. This global expansion strategy underscores Sygnum’s commitment to broadening its reach and influence in the digital asset space.
Sygnum Bank’s achievement of profitability through a substantial increase in crypto trading volumes is a testament to the growing integration of cryptocurrencies into mainstream financial systems. As the bank continues to innovate and expand its offerings, it sets a benchmark for other institutions in the crypto banking sector.
Featured image credit: Freepik
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