Nomura Holdings told CoinDesk in an email comment on Wednesday that the Laser Digital division’s tighter risk controls are designed to limit short-term earnings fluctuations while focusing on long-term strategy, pushing back against suggestions that it is losing confidence in cryptocurrencies.
The bank said, “Due to the nature of the crypto asset business, certain fluctuations in earnings are unavoidable, and we recognize that it is important to take a medium- to long-term perspective.” “At the same time, we have further tightened our position and risk limits to limit short-term earnings volatility. We continue to capture growth opportunities in the crypto market while strengthening our services and customer base.”
This clarification follows comments from Chief Financial Officer Hiroyuki Moriuchi, who said on an earnings call that the company had introduced “tighter position management” at Laser Digital to reduce risk exposure and limit fluctuations in returns due to cryptocurrency market volatility. The division’s losses led to a 9.7% decline in Nomura’s third-quarter profit.
The bank’s strategic shift comes as the cryptocurrency market has suffered a sharp decline, with total value declining by nearly 5 trillion yen since January 29, according to CoinGecko data. On Tuesday, Bitcoin fell to its lowest level since President Donald Trump was re-elected in early November 2024, hitting a low of $72,870 before rebounding to more than $76,000, according to data from CoinDesk.
Nomura’s decision comes just days after Bitcoin hit an all-time high of more than $126,200 and after the Oct. 10 flash crash wiped out more than $19 billion in leveraged positions. Bitcoin’s year-end closing price was about $87,000, about 31% below its peak, and the market capitalization of virtual currencies also fell by more than 30% to more than $3 trillion.
Nomura denied the decision meant it had lost confidence in the sector. “Laser Digital’s risk management worked as designed. Exposures were reduced early, losses were contained, and the company avoided more severe impacts felt around the world,” the company said.
The bank, said to be Japan’s largest investment bank with $673 billion in assets under management as of the end of last year, acknowledged that volatility is an inevitable feature of the crypto business.
“Due to the nature of the digital asset business, Laser Digital and other peers are exposed to a beta market,” the bank told CoinDesk. “However, Laser Digital’s risk-taking is at the level of a Trad-Fi institution, and its third-quarter results do not indicate any fundamental weakness.”
