Ben Strack

<div id="highlights-block_620c122c81d04" class="highlights">
 <ul>
 <li>The company is investing in a number of new business lines to reduce reliance on trading volume, CEO Steve Ehrlich said on a Tuesday earnings call</li>
 <li>Voyager is building an NFT offering that will allow customers to access a variety of marketplaces</li>
 </ul>
 
</div>



Voyager Digital is doubling down on staking and moving into NFTs as the company looks to diversify revenue streams following a record quarter.



The company doubled its revenue in the fourth quarter compared to the previous three-month period, executives said on a Tuesday earnings call.&nbsp;



Revenues of $165 million last quarter — consistent with <a href="https://cms.blockworks.co/voyager-estimated-quarterly-revenue-doubles-despite-lawsuit/" target="_blank" rel="noreferrer noopener">estimates announced in January</a> —  were up from $3.5 million during the same period a year earlier. 



Profits were more muted at $2.5 million, dragged down by a $16-million loss in the company’s staking and lending business. Rewards paid to customers outpaced fees from those services, according to Compass Point Analyst Chris Allen. He wrote in a research note that the deficit was an improvement from prior quarters.



CEO Steve Ehrlich said he expects Voyager’s staking business to become profitable sometime this year.



“We are investing heavily in revenue diversification as we look to reduce our reliance on trading volume,” Ehrlich said.



Roughly $87 million in revenue came from transactions, according to Chief Financial Officer Evan Psaropoulos. About $57 million stemmed from lending and staking, beating the company’s $50-million target for the sector.



“The diversification of our revenue is leading us to believe that even in times of lower market activity and lower crypto prices, our minimum quarterly revenue will exceed $100 million,” Psaropoulos said. “The increase in revenue diversification strategy and product roadmap will only increase the minimum floor.”



Total verified users increased about 50% to 3.2 million at the end of 2021, while funded accounts grew about 25% over the same span to reach nearly 1.1 million.&nbsp;



Assets on the platform grew to $5.9 billion, as of Dec. 31, up from $4.3 billion at the end of September.&nbsp;



<h3 class="wp-block-heading">Staking, NFTs and equity trading</h3>



Voyager now supports staking for 11 coins, and Ehrlich noted that the company is working to offer staking on Avalanche (AVAX).



The firm continues to target a minimum of $40 million in yield and staking revenue per quarter.



Voyager has also hired a team to develop its NFT (non-fungible token) strategy. Ehrlich said the company is focused on simplifying NFT participation.



“We believe that there are so many marketplaces out there, consumers want to be able to access them all, and how we deliver that entire environment to them, we believe, is the future of NFTs,” he said. “It’s not just one marketplace, and so we’re looking at a solution that encompasses a larger scale all off the Voyager platform.”



Voyager is also building a “brokerage of the future,” where users would be able to trade equities from the company’s app using stablecoin USDC for funding trades.&nbsp;



The company in November detailed its forthcoming <a href="https://cms.blockworks.co/voyager-digital-to-debut-crypto-debit-card/" target="_blank" rel="noreferrer noopener">crypto debit card</a>, which would pay up to 9% annual rewards. Ehrlich said Tuesday that select employees are testing the card, adding that its waitlist has reached 200,000 people.



Voyager, meanwhile maintains plans to expand to France and other European countries later this year.



<h3 class="wp-block-heading">Does BlockFi’s settlement affect Voyager?&nbsp;</h3>



Ehrlich also touched on <a href="https://cms.blockworks.co/crypto-lender-blockfi-to-pay-100m-in-fines-to-us-regulators/" target="_blank" rel="noreferrer noopener">BlockFi’s settlement</a> with regulators, which he called “a significant development in the industry” that could provide a potential regulatory path.



The crypto lending platform is reportedly expected to pay $100 million in fines to the Securities and Exchange Commission and state regulators over allegations it illegally offered a high-interest yield product.



BlockFi CEO Zac Prince wrote on Twitter Monday that the settlement “identifies a clear path forward for folks to earn interest on their crypto.”



Ehrlich argued there are differences between <a href="https://www.investvoyager.com/vlp/" target="_blank" rel="noreferrer noopener">Voyager’s Loyalty Program</a>, which offers Voyager Token holders rewards, and BlockFi interest accounts. Voyager is in ongoing discussions with regulators, he added.&nbsp;



“Voyager has received requests and subpoenas from the SEC and certain states in connection with the rewards program as part of non-public fact-finding inquiries,” Ehrlich said. “Of course, we believe that Voyager accounts that earn rewards comply with existing US law and look forward to demonstrating that as necessary.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Crypto Platform Voyager Keying in on Staking, NFTs in 2022

<div id="highlights-block_617c4ec74c780" class="highlights">
 <ul>
 <li>Recent partnership with Alameda Research will help firm with NFTs, which “are core to what we want to bring to the market in 2022,” Voyager CEO Steve Ehlrich said</li>
 <li>Despite lower revenues in quarter ended Sept. 30, executive notes current quarter revenues could be record highs</li>
 </ul>
 
</div>



While Voyager Digital is looking to bring crypto-backed debit cards and expanding internationally in the near-term, the company is also focused on delving into the NFT space next year through a new partnership.



The publicly traded cryptocurrency platform announced yesterday <a href="https://cms.blockworks.co/a16z-invests-250m-in-alchemy-alameda-backs-voyager-with-75m/" target="_blank" rel="noreferrer noopener">a $75 million investment </a>from crypto market maker Alameda Research, which trades over $5 billion per day. CEO Steve Ehrlich said that in addition to aiding the firm on the order flow and asset management front, Alameda would also ultimately help Voyager get more involved in the NFT space. 



“They understand the NFT space; they’ve helped build out the Solana network,” he said of Alameda Research during an earnings call on Friday. “NFTs are core to what we want to bring to the market in 2022, and having some more assistance as we grow out our own teams to do that is very important for us.”



Ehrlich said Voyager intends to make NFTs on multiple platforms accessible to its users, which now totals more than 2 million.&nbsp;



Voyager could look to build its own NFTs, the CEO said, noting the firm’s relationships with NFL tight end Rob Gronkowski and Nascar driver Landon Cassill. But more than creating its own, the company will focus on offering access to NFTs and its marketplaces to as many people as possible.



“Customers don’t know how the internet works still today — 20-something years after the internet, but they use it,” Ehrlich said. “We want them to use the system and make it easy, and that’s why we look at the NFTs and how we bring that marketplace — whether it’s on Solana, Algorand, Avalanche or Ethereum.”



<h3 class="wp-block-heading">Continued growth&nbsp;</h3>



Ehrlich’s remarks came during a conference call summarizing Voyager’s fiscal year 2021, which ended on June 30. The company reported total revenue of $175 million during the year, up from $1 million during the prior year. Assets under management grew from $35 million to $2.6 billion during the one-year span, as funded accounts shot up from 23,000 to 665,000.



Transaction revenue of $154 million beat estimates of $143 million, according to a note authored by Chris Allen, an analyst at Compass Pointe Research &amp; Trading. Fees from crypto assets loaned were $21 million, missing the research firm’s missing our $31 million estimate.



Voyager earlier this month <a href="https://cms.blockworks.co/voyager-digital-preliminary-revenue-drops-40-from-previous-quarter/" target="_blank" rel="noreferrer noopener">projected its revenue</a> for its fiscal 2022 first quarter ending on Sept. 30 to be between $63 million and $67 million, down from $109 million in the previous quarter.



Ehrlich said Friday that the firm last quarter focused on its account growth, which he called the most important long-term metric and strategy. Sustaining that growth used a lot of expenses, he added.&nbsp;



October has been an active month for Voyager, Ehrlich said, noting continued account growth and trading volume.



“I think we’re gaining market share on people,” he said, adding that the Voyager app was ranked 55th in the US this morning on the Apple Store. “With the coins we have, with the ease of use on the platform and how intuitive it is…we’re gaining market share.”&nbsp;&nbsp;



The CEO partly attributed the app boost from its most recent <a href="https://cms.blockworks.co/voyager-digital-partners-with-dallas-mavericks/" target="_blank" rel="noreferrer noopener">partnership with the Dallas Mavericks</a>. In conjunction with the deal, the company offered $100 worth of bitcoin to those who download the app, deposited $100 and traded at least $10. 



“The current quarter could achieve record revenue…validating our strategy to focus on account growth,” Ehlrich said. “We expect to continue to invest heavily into marketing, product development and security.”



To keep up with the growth, Voyager expects to double its headcount in the next six to nine months, as it will seek to hire more developers, product managers and marketers.&nbsp;



<h3 class="wp-block-heading">What’s next?&nbsp;&nbsp;</h3>



Voyager CFO Evan Psaropoulos said the company began engaging with borrowers to accommodate additional loan capacity earlier this year and expects to continue seeing the benefits of these lending relationships.&nbsp;



Voyager partnered with Blockdaemon in April to enable its users to earn interest on a wider scope of coins offered on the platform, and Psaropoulos said Voyager expects to see consistent staking revenues of $40 million to $50 million per quarter, beginning this quarter.



As for future offerings aside from NFTs, the company’s near-term focuses include launching an enhanced loyalty rewards program and a crypto-backed debit card, as well as expanding to Europe, according to Ehrlich. The CEO noted that European regulators earlier this month <a href="https://www.prnewswire.com/news-releases/voyager-digital-secures-final-approval-to-begin-operations-in-europe-301399023.html" target="_blank" rel="noreferrer noopener">approved Voyager</a> to serve customers in France and the European Union.



Coinify, the crypto payment platform Voyager recently acquired that offers individual payment processing in 15 cryptocurrencies and transaction settlement in 20 fiat currencies, “will be the backbone” of Voyager’s launch expansion to Europe, Ehrlich noted.



Voyager is also looking into offering credit cards or collateralized loans.



“With the significant assets we have, [customers are] going to want to borrow against some of those assets with us, so we’re looking hard at the credit side … but those are longer-term projects for us.”

Voyager Looking to Enter NFT Space in 2022, CEO Says

<div id="highlights-block_617a6a2ad200b" class="highlights">
 <ul>
 <li>Mavericks owner Mark Cuban has recently touted bitcoin and Ethereum, and his team began accepting dogecoin as a payment for merchandise earlier this year</li>
 <li>Voyager, which now has more than 2 million verified users, looking to expand to Europe in 2022</li>
 </ul>
 
</div>



Voyager Digital has partnered with the Dallas Mavericks as crypto firms continue to infiltrate the sports realm to bolster brand awareness and drive cryptocurrency adoption.



As part of the five-year agreement, the two organizations will seek to make cryptocurrency more accessible through educational and community programs, as well as fan engagement promotions.&nbsp;



“There’s a lot of hype, there’s a lot of discussion, but most people don’t really understand the fundamentals behind it, and we’re really going to try to bring that level of education to our fans and to our joint customers,” Mavericks owner <a href="https://cms.blockworks.co/?s=mark+cuban" target="_blank" rel="noreferrer noopener">Mark Cuban</a> said during a press conference Wednesday.



He added during the event that he transferred a portion of his own Polygon (MATIC) tokens to the platform because Voyager paid a higher return rate than Aave, the application he was using before.



The partnership also includes naming rights to the Mavs Gaming Hub, the official gaming and event venue for the Mavs NBA 2K League team, which will be announced at a later date. There will also be on-rotation, digital, and in-arena signage during games.



“Blockchain, cryptocurrency, bitcoin have all been around for 10-plus years, but in the end people are just starting to learn about it,” said Steve Ehrlich, Voyager’s CEO and co-founder.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“In the last nine months, we’ve seen an explosion of people having interest in cryptocurrency.”</blockquote>



Voyager Digital is a publicly traded cryptocurrency platform with more than 2 million verified users that allows investors to trade more than 60 currencies.&nbsp;



The company has partnered with the Mavericks because of the team’s leadership role in the NBA, established equity and recognition in crypto, as well as their fans&#8217; understanding and adoption of crypto, Ehrlich explained.&nbsp;



He noted that he wants to engage more with the Dallas community, and Texas overall, which he said has become a crypto hub. Ehrlich added that though Voyager is currently US-centric, the company is looking to expand its presence to Europe by the end of March 2022, starting with France.



The Mavericks began accepting dogecoin (DOGE) as a payment for merchandise in March, and also offered special pricing for those paying with the crypto asset during the organization’s summer sale. Despite dogecoin being created as a joke, Cuban previously told CNBC that “the community for DOGE is the strongest when it comes to using it as a medium of exchange.”&nbsp;



Cuban is bullish on bitcoin and ether. He posted on Twitter earlier this week that bitcoin’s huge advantage is that it has “zero competition” as a store of value. He also recently told CNBC that ether likely “has the most upside” as an investment.



Cuban argues that though coins like SHIB and DOGE are not investments, their low cost make them a potential good way to enter the crypto space and learn more about it.



The partnership is the latest example of Voyager, as well as other firms, gravitating toward partnerships with sports leagues and athletes to expand their presence.



Voyager announced an agreement in June with NASCAR driver Landon Cassill to pay him in a portfolio of cryptocurrency, including Litecoin and the Voyager Token. Last month, the company named NFL tight end Rob Gronkowski as a Voyager brand ambassador and shareholder.



FTX has also made sports partnerships a priority, becoming the first cryptocurrency exchange to sponsor a professional sports league with its five-year partnership with Major League Baseball.&nbsp;



It has tapped high-profile athletes such as Tom Brady, <a href="https://cms.blockworks.co/ftx-names-stephen-curry-a-global-ambassador/">Steph Curry</a> and, most recently, <a href="https://twitter.com/davidortiz/status/1453158138018947072">David Ortiz</a> to be brand ambassadors.



FTX also sponsored the Miami Heat’s sports arena as part of <a href="https://cms.blockworks.co/ftx-inks-135m-sponsorship-deal-for-miami-heat-arena/">a $135 million deal</a> in March.&nbsp;



“What FTX did with the Heat was great, and they’re also trying to push their retail software application,” Cuban said. “But at the same time, I think we’re trying to make this driven more towards education and exposing more people in an educated manner to crypto through Voyager.”