NYSE-owner ICE cool with crypto 'winter' as profits climb

(Reuters) - The collapse in value of cryptocurrencies came at on opportune time for Intercontinental Exchange Inc, allowing the exchange operator to buy assets at a discount for its long-awaited crypto-trading platform affiliate Bakkt, the head of the company said on Thursday.

A screen displays the logo and ticker symbol for Intercontinental Exchange, Inc. on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 3, 2016. REUTERS/Brendan McDermid

“It’s really been helpful that the cryptocurrency industry sort of went into what they call a winter,” said ICE’s Chief Executive Officer, Jeffrey Sprecher, on a call with analysts after the company reported stronger-than-expected first quarter financial results.

“That took some of the heat off of the timetable to launch.”

Bakkt has been in the works for two years and ICE, which also owns the New York Stock Exchange, announced its plans for the new company in August. But Bakkt, which is aimed at institutional investors and ties in with a proposed physically settled bitcoin futures contract to be launched on ICE’s U.S. futures exchange, had faced regulatory delays and still does not have a launch date.

In late 2017, the price of bitcoin [BTC=BTSP] surged to nearly $20,000, prompting a flood of interest in it and other cryptocurrencies and a wave of new cryptocurrency-focused companies that attracted large valuations. But last year, the price collapsed by three quarters, initiating the so-called winter that sapped valuations and kept institutional investors largely at bay.

During that lull ICE has been scooping up talent and building out Bakkt, including through acquisitions, said Sprecher.

“We’ve actually looked at a number of different companies and acquired a company earlier this week that wouldn’t have been available to us if the market had been really hot,” he said.

ICE said on Monday it bought crypto-custody firm Digital Asset Custody Co for an undisclosed amount.

The Atlanta-based company said on Thursday that excluding one-time items, like M&A costs, it earned a profit of 92 cents per share in the first quarter, topping the mean of analysts expectations by 2 cents, according to IBES data from Refinitiv.

A 5 percent rise in revenue by ICE’s data unit, to $546 million, helped offset a softer trading environment which led to a 4 percent decline, to $862 million, in the company’s transaction and clearing unit.

Net income attributable to the company rose to $484 million, or 85 cents per share, in the quarter ended March 31, from $464 million, or 79 cents per share, a year earlier.

Total revenue, excluding transaction-based expenses, increased 3.7 percent to $1.27 billion.

Reporting by John McCrank in New York and Bharath Manjesh in Bengaluru; Editing by Shinjini Ganguli and Phil Berlowitz