Summary Coincheck Group N.V. primarily operates a Japan-based cryptocurrency exchange facing significant valuation and market risks. Though verified users of CNCK's crypto exchange have increased each month, that growth is slowing and exchange volume was down in each of the last two quarters. The company is growing through M&A and seemingly buying good assets. But dilution remains an ongoing risk to consider. CNCK is a volatile stock that should perform with digital assets broadly. It's a high-risk, high-rewards speculative stock trading at a premium to peers. About a year ago, I initiated coverage of Coincheck Group N.V. ( CNCK ) for Seeking Alpha. The company primarily operates a Japan-based cryptocurrency exchange. Back then, I called the stock a Hold and cited what I felt where way too many risks to consider longing the stock: There is valuation risk, single jurisdiction risk, and market risk. Demand for crypto assets in Japan simply has not been as robust as it is in the rest of the world. In hindsight, a Sell call would have been more appropriate as the stock has fallen by over 70% since my article last January. Given the massive slide in the stock's price as well as several catalysts since the last note, it's time to revisit CNCK. M&A Activity Over the last year, Coincheck has been quite active with mergers and acquisitions. In October, the company completed its purchase of crypto prime brokerage Aplo SAS in an all-stock transaction. Earlier in 2025, Coincheck bought Next Finance Tech Ltd in an effort to eliminate the need for the third party staking services the company had previously been using as part of its Coincheck Staking product. More recently, the company agreed to acquire Canadian digital asset manager 3iQ from Monex Group - the latter of which is a major shareholder of CNCK stock. The deal, which will again be an all-stock transaction, would result in 27,149,684 new shares being issued. While the dilution is significant given 130.8 million shares outstanding at the end of September and likely 5-6 million shares for the Aplo deal in October, these mergers do address one of the primary concerns that I had last year when I first covered the stock. Specifically, that crypto-interest levels from the Japanese market was lackluster and a company operating a retail investor crypto exchange solely in Japan was a potentially dubious investment. With the Aplo deal, Coincheck adds an institutional investor footprint in Europe. And assuming the 3iQ deal closes, Coincheck will have ETF assets managed in the Canadian market as well. Based on my calculations of 3iQ's management fees relative to the $1.1 billion in AUM currently managed by the company, Coincheck is paying a little under 7x sales to buy 3iQ. This puts the valuation of 3iQ in line with BlackRock ( BLK ). Furthermore, Monex Group did the deal at $4 per share while CNCK stock trades under $3. My interpretation of this is Monex is simply consolidating its crypto business assets while also signaling to the market that it is committed to holding the newly issued shares since the market values them well below $4. Coincheck Metrics One of the metrics that Coincheck frequently shares to show growth is its verified accounts for the Coincheck platform. As of the end of December, that figure was just under 2.5 million. Something to consider is that month over month growth in verified accounts did go down slightly during the three months ended December. During calendar Q4 '24, monthly verified account growth averaged 1.5% each month. That figure was down to just 0.7% during calendar Q4-25. Coincheck Verified Accounts (Coincheck, Analyst's Chart) For the benefit of simplicity, we're going to also look at the quarterly exchange data through calendar year quarters rather than fiscal year quarters. While we don't yet have full financials for Coincheck through the end of calendar 2025, we do have the exchange volume data through the end of the year and it isn't really a pretty story. Calendar Quarters Exchange Volume (millions Yen) YoY Change Q2-24 1,050,308 Q3-24 1,062,632 Q4-24 1,674,094 Q1-25 1,459,506 Q2-25 1,052,175 0.18% Q3-25 949,466 -10.65% Q4-25 1,209,344 -27.76% Source: Coincheck filings. The table above shows that year over year exchange volume in 2025 has declined in each of the last two quarters. To be sure, Q4 '25 has a difficult year over year comparison due to the strength of Q4 '24. But even if we take the average exchange volume from the last three quarters compared to the prior year, 2025 was down by 15% from the 2024 time period. Latest Financials Despite the weakness in exchange volume during the 3 months ended September, Coincheck was able to generate a 58% increase in dollar-denominated top line revenue from the prior quarter and an 84% increase year over year. In Q2 for fiscal 2026, Coincheck reported $900 million in total revenue and a net profit of $2.4 million: FY26 Q2 (Coincheck) This was a sequential improvement from FY26-Q1 where Coincheck reported a $9.3 million net loss. The company said the biggest reason for the improvement in the bottom line was gross margin growth as well as declines in SG&A during the quarter. Given the cash burn through the first two quarters of fiscal year 2026, Coincheck has several quarters of cash remaining before it would figure to need to raise capital with over $60 million in cash and equivalents: Assets (Coincheck) A large amount of the assets held by the company are customer assets and borrowed crypto assets. Netting out those deposits and crypto borrowings, Coincheck has a little over $70 million in equity. Which means that at a $368 million market capitalization, CNCK is trading at a little over 5 times book value. Which is a bit pricey for the financials sector median of 1.3 and a little higher than the 4x book multiple the market is currently giving Coinbase ( COIN ). And again, there is likely going to be another 27 million shares issued when the company closes the 3iQ deal. Risks There are still several risks that potential investors should consider before longing CNCK. Given the combination of growing users and declining volume in 2025 through the company's legacy product, I think it's pretty clear Coincheck had to do something to stimulate top line revenue growth going forward. M&A is certainly a way to do that provided it brings complementary pieces into the company. In my view, Coincheck is improving its portfolio of assets out of a single jurisdiction and into synergistic businesses. But it is coming at a cost to shareholders through dilution. This is something I think investors need to continue to monitor due to Coincheck's stated goals from its prior earnings presentation. The company apparently wants to get into payments and lending as well. Closing Summary Believe it or not, I don't actually hate a speculative CNCK long under $3 per share. I'm not personally holding the stock currently. But in a broader risk market rally that takes stocks and crypto higher, I think CNCK could potentially see gains. Shares traded as high as $9 less than two months ago. Data by YCharts There was a massive intraday move on December 1st that saw over 27 million shares traded during a rally that more than doubled the stock price. Since then, CNCK shares have bled down to a fresh 52 week low before rallying back up over $3. The point is, it's an incredibly volatile stock right now. And if we see digital assets make a move higher, it would figure to bring CNCK shares higher in tandem. To be sure, this is not necessarily a great reason to "invest" in the stock. But if you're looking for high-risk, high-reward plays in the digital asset space, CNCK may not be a bad option.
