During its second-quarter earnings call on Friday, exchange operator Cboe reported a $460 million markdown on its recent purchase of ErisX, a crypto asset exchange acquired by the firm in May to help lead its reentry into the digital asset spot and derivatives markets.
Cboe also reported profits below Wall Street expectations, with rising compensation listed as a key factor in the missed targets.
The firm's plans to acquire ErisX were announced on October 20, when the price of bitcoin was trading around $67,000. Since that time prices have dropped significantly, with the price of bitcoin currently hovering around $23,300.
On the results call, Cboe Global Markets chief executive Ed Tilly said since the closing of the ErisX transaction, the digital asset market environment had changed dramatically, which had led to the accounting adjustment.
Brian Schell, Cboe’s chief financial officer, said on the call that "we believe that our adjustment reflects the reality of the digital asset market environment today, but in no way changes our commitment to the digital asset space."
Despite the mark-down, Cboe reported rising revenue from options trading, futures trading, global foreign exchange trading, and North American and European equities.
The increase came from investors readjusting their portfolios to hedge against the recent economic downturn, which drove transaction volumes higher.