Swiss banking firm Swissquote Group (SQN) cut full-year revenue and profit forecasts after first-half net crypto income fell 66.2% to 14.6 million Swiss francs ($18 million).
Crypto trading volume at the Gland, Switzerland-based fintech fell 63.5% to 2.58 billion Swiss francs, per its results presentation. It cut its net revenue outlook for the year by about 30 million francs to 730 million francs.
- This drop shows clients are more cautious in a volatile crypto cycle. Traders who once relied on steady liquidity and tight spreads may have pulled back, while others paused to reevaluate risk due to ongoing price swings across major tokens. In stressed markets, even casual investors often trade less and wait for clearer price signals before acting.
- The revenue cut comes from lower trading volume and possible shifts in fees and product mix. With fewer trades, revenue from per-trade commissions and spreads falls, while fixed costs stay. Selling ancillary services like lending, staking, or derivatives may also slow in a risk-off environment, reducing overall net revenue.
- Management may respond with steps to boost resilience, such as simplifying onboarding, offering promotions to spark activity in select segments, or shifting marketing spend toward higher-conversion channels. This could include targeted campaigns for institutions seeking liquidity or better analytics tools to attract high-frequency traders who bring steadier fee revenue.
- The broader backdrop and rules also matter. A slower crypto market and stricter compliance can deter new clients and cool interest in complex trading strategies. Firms often counter this by strengthening risk controls, improving settlement reliability, and increasing transparency around custody and safety to reassure current and potential investors.
Swissquote noted that the downtrend in most digital currencies led to an underperformance relative to its initial projections. Bitcoin BTC$63,669.97, the leading cryptocurrency, declined by 33% over the six months through June 30. Ether ETH$1,887.75, the second-largest token, fell 47% and the CoinDesk 20 Index (CD20) dropped 40%.
Swissquote stated that the updated guidance mirrors a crypto climate that is weaker than anticipated.
Swissquote recorded a loss of 5.3 million francs on the crypto inventory it holds to back trading on its SQX exchange.
Expansion elsewhere kept total revenue largely steady and narrowed the profit drop. Client assets climbed almost 20% to 96.3 billion francs.
The firm’s stock dropped 14% following the announcement.
