Japan's Largest Wealth Manager Reduces Crypto Exposure Following Q3 Losses

Nomura Holdings, Japan's largest wealth manager, is tightening its risk management practices at its European cryptocurrency subsidiary in response to losses recorded in the third quarter. This cautious approach comes amid escalating market volatility, which has led to significant declines in digital asset valuations.

Key Takeaways

Nomura Holdings is reducing risk at its European crypto subsidiary after Q3 losses.
The firm reported a significant drop in net income, leading to a decline in shares.
CFO Hiroyuki Moriuchi emphasized stricter position management in response to market volatility.
Despite financial setbacks, the subsidiary has filed for a U.S. national bank trust charter to expand digital asset trading.

Recently, Bitcoin dipped below $80,000 as many firms holding substantial crypto reserves reported billions in unrealized losses.

According to a report from Bloomberg, Nomura's shares plummeted 6.7% on Monday, marking their most significant intraday decline in over nine months. This drop followed a 9.7% year-over-year decrease in net income, which totaled ¥91.6 billion (approximately $590 million) for the quarter ending December 31.

Japan's Nomura Q3 Losses - Nomura Shares Price Chart

Hideyasu Ban, a senior analyst at Bloomberg Intelligence, commented that the market's reaction to Nomura’s performance is likely to be "short-term" as investor anxiety unfolds amid broader weaknesses in Asian markets.

Financial Challenges in Crypto

Nomura's Chief Financial Officer, Hiroyuki Moriuchi, disclosed during an earnings presentation that the firm is "reducing the amount of risk" associated with Laser Digital Holdings, its Switzerland-based digital asset subsidiary. This unit has incurred losses in the third quarter due to ongoing market fluctuations, prompting tighter risk management protocols across its crypto operations.

“Profits can fluctuate greatly due to market volatility, thus we implement strict position management to mitigate risk,” Moriuchi stated, though he assured that the firm's long-term commitment to digital assets remains steadfast.

Nomura's international operations generated ¥16.3 billion before taxes, marking the tenth consecutive profitable quarter. However, this figure was about 70% lower compared to the same period last year, primarily due to losses in Europe.

Despite the crypto difficulties, Nomura achieved robust results overall, with four segments reporting the highest pretax income in 18 years. Wealth Management reached a record-high in recurring revenue, and Investment Management saw assets soar to a record ¥134.7 trillion, thanks to the $1.8 billion acquisition of Macquarie's asset management division.

Japan's Nomura Q3 Losses - Excerpt from the Q3 Report

Additionally, Nomura has announced plans to repurchase up to ¥60 billion in shares, representing 3.2% of its outstanding stock.

Broader Industry Impacts

Nomura's struggles reflect a wider trend across the crypto treasury sector, where significant holders are facing substantial unrealized losses.

One strategy firm reported a staggering $17.44 billion in unrealized losses from digital assets for the quarter ending December 31, coupled with a $5.01 billion deferred tax benefit, as per an 8-K filing.

Despite the hit, this firm continued to accumulate Bitcoin, purchasing an additional 2,932 BTC for about $264.1 million between January 20 and January 25. Meanwhile, Bitmine Immersion Technologies, linked to investor Tom Lee, is contending with over $6 billion in unrealized losses on Ether after adding 40,302 ETH the previous week. The firm’s total Ether holdings of more than 4.24 million ETH are now valued at around $9.6 billion, a drop from an estimated peak of $13.9 billion in October, as Ether's price fell toward $2,300.

Japan’s Metaplanet has also reported an impairment of 104.6 billion yen ($680 million) on its Bitcoin holdings and forecasted a consolidated ordinary loss of 98.56 billion yen ($640 million) for fiscal 2025. They announced a capital raise of $137 million through a third-party allotment following a 70% decrease from June high prices.

Future Outlook and Regulatory Developments

In spite of these financial challenges, Laser Digital has applied for a U.S. national bank trust charter with the Office of the Comptroller of the Currency, according to the Financial Times. This application will allow the Nomura subsidiary to facilitate spot digital asset trading without the need for state-specific custody permits.

The approval process is typically two-stage and may take over a year to complete, with preliminary clearance anticipated within four months.

This filing aligns with a wave of applications from fintech and cryptocurrency firms seeking to benefit from the lighter regulatory environment established by the previous administration. Notable companies such as World Liberty Financial and European fintech firm Revolut are also moving to submit their applications.

Nevertheless, market sentiment is mixed regarding the near-term future. Matt Hougan, the chief investment officer at Bitwise, suggested that Q4 2025 might have "quietly signaled the end of the crypto bear market," drawing parallels to early 2023 when the fundamentals improved even amid weak prices.