Telegram Gains $148M from Crypto in 2023, But Loses $100M

Telegram’s Growing Dependence on Crypto

Telegram, the well-known messaging platform, is increasingly reliant on cryptocurrency, particularly through its integration with the TON blockchain. This crypto involvement now represents a significant share of the company’s revenue, highlighting a shift in its business model.

Telegram’s Revenue Tied to Crypto

A recent report from the Financial Times reveals that Telegram generated $148 million from cryptocurrency activities in 2023. This figure includes $130 million from its integrated wallet services, which surpasses revenue from traditional sources like advertising and premium subscriptions.

In September 2023, Telegram launched a self-custodial wallet aimed at crypto users. This wallet allows users to manage, trade, and store their crypto assets directly within the app, bypassing the need for external wallet services like MetaMask. Additionally, Telegram earned $17.8 million from selling digital collectibles, such as usernames and virtual phone numbers, with payments made in Toncoin, the native cryptocurrency of the TON blockchain. Together, these crypto-related activities accounted for 40% of Telegram’s annual revenue.

The report also noted that Telegram’s financial strategy has shifted significantly toward crypto. The company now holds $399.2 million in crypto assets, a substantial increase from $106.35 million in 2022. In contrast, its cash reserves for 2023 were only $170.85 million, while its real estate and equipment assets were valued at $372.94 million. This shift suggests that crypto assets have become Telegram’s most valuable resource. Although the report did not specify which cryptocurrencies Telegram holds, it is widely believed that Toncoin plays a central role due to its deep integration with the platform.

Financial Challenges Despite Crypto Revenue

Despite its strong crypto revenue, Telegram is struggling financially. The company reported $108 million in losses for 2023, despite generating $342.5 million in revenue. This indicates that Telegram's expenses have soared to $450.5 million, outpacing its income and leading to significant financial losses.

The company’s founder and CEO, Pavel Durov, is also facing legal challenges. Last week, a French court charged him with facilitating illegal activities through the app, adding another layer of complexity to Telegram’s business landscape.

Telegram’s increasing reliance on cryptocurrency, while profitable, has not been enough to offset its rising costs. This financial strain is compounded by the legal issues surrounding its operations, raising questions about the sustainability of its current strategy. Despite the substantial growth in crypto-related revenue, Telegram’s financial health remains precarious, with ongoing losses and legal battles posing significant challenges for the future.

Conclusion: The Future of Telegram in the Crypto Space

As Telegram continues to deepen its involvement in the crypto industry, its financial landscape is becoming more complex. The significant revenue from crypto activities underscores the platform’s growing role in the digital asset space. However, the company’s ongoing losses and legal challenges suggest that the road ahead may be rocky.

The shift towards cryptocurrency has made crypto Telegram’s most valuable asset, but whether this strategy will be enough to stabilize the company remains uncertain. The outcome will likely depend on how well Telegram can manage its expenses, navigate legal challenges, and continue to innovate in the fast-evolving world of digital finance.