Monex Reports Lower Revenue As Crypto Slowdown Takes Effect

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Monex Group released its third-quarter 2022 financial metrics, which saw a reversal in revenue as TradeStation grappled with a crypto market crash that sent the profitability of its crypto business plummeting.

For the nine months ending December 2022, Monex disclosed operating revenue of $65.9 billion ($416 million), down 18% from $65.9 billion in 2021. In terms of results, the Tokyo-based financial services giant reported earnings before interest, tax, depreciation and amortization (EBITDA) at $8.7 billion ($67.4 million).

Comparing the base profit figure to its 2021 counterpart, the latest EBITDA was also 61% lower year-on-year, down from 22.8 billion. Blaming the fast and furious crypto downturn, Monex said the drop in trading volume was a result of the unfavorable market situation.

Monex noted that its operating profit in the U.S. segment (TradeStation) has improved significantly since changing strategy in August 2022. The company attributed the improved profitability to lower costs and higher financial income due to the rise in interest rates. In addition to stable earnings from the Japanese and US segments, the group expects its crypto business to have upside potential as the digital asset market recovers.

Increase in operating income from online brokerage activities in Japan and the United States thanks to higher interest rates and a favorable foreign exchange market. The US dollar cash position held by the holding company Monex Group resulted in a quarterly loss due to the appreciation of the yen, but the cumulative gain was recorded for the 1st to 3rd quarter of the March 2023 fiscal year. US dollar cash position needs to be unwound, she told me.

TradeStation Crypto, the subsidiary of TradeStation Group focused on digital assets, announced the smooth rollout of its services in Puerto Rico last year. However, the recent results illustrated the daunting challenges the company faces at a turbulent time for the crypto industry.

Tailor-made for crypto traders, TradeStation uses global integrations to create a large pool of liquidity sources that allow for better price discovery and transparency. The company further promotes its crypto desktop by helping traders avoid lengthy trades on traditional exchanges, as well as avoid the fees charged by other platforms for high-volume instant trades.

The crypto-focused offshoot relies on its parent company’s brokerage industry expertise to address what it perceives to be key concerns and some weaknesses in the current cryptocurrency ecosystem.

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