Despite explosive growth in the third quarter in the security token industry, OverstockThe third quarter 2020 earnings report shows that its alternative trading system tZERO (ATS) continues to lose money.
The ATS specializes in security tokens and is hosted consistently more than 95% of the sector’s monthly trading volumes. tZERO has seen dramatic growth in recent months, with monthly volume growing from less than $ 1 million in May to $ 21.8 in trade in August – before slipping back to $ 9 million in September.
While tZERO’s net revenues are up 97% year over year to $ 11.1 million, the latest from Overstock profit report shows that tZERO lost $ 12.4 million pre-tax for the third quarter in total.
Looking at its performance for the nine months ended September 30, tZERO posted a loss of $ 35.5 million despite net sales of $ 34.1 million. During the same period in 2019, tZERO generated $ 15.7 in revenue, but lost $ 38.7 million.
In 2013, Overstock, then a successful online retail company, became one of the first major mainstream companies support Bitcoin. Despite the announcement that it would shift from retail to a focus on blockchain and cryptocurrency technology in 2018, retail is the only segment of Overstock’s business that is currently profitable and generated $ 43 million in revenue in the quarter.
Overstock venture arm Medici Ventures Inc, which provides ongoing support for the development of the Ravencoin tokenization protocol (RVN), netted just $ 2.8 million in Q3 to post a quarterly loss of nearly $ 6.6 million in total.
On October 28, Medici Ventures announced it had made an $ 8 million share purchase in Caribbean-focused blockchain technology provider Bitt. Medici previously bought $ 4 million worth of stock from Bitt in 2016, followed by a $ 3 million share purchase in 2018.