DeFi Technologies Inc. (OTC: DEFTF) is a Small Cap Company Making It Easy to Invest in the Rapidly Growing Blockchain Revolution.
After the market closed on August 14th, DeFi Technologies reported its 2Q24 earnings results. On an IFRS basis, the company reported 2Q24 EPS of $0.20. Net income totaled of $66.0 million for the quarter versus Zack SCR’s $12.7 million forecast. $97.3 million in total revenue for the quarter was also well above Zack SCR’s $17.1 million forecast.
Money has poured into the newly created Bitcoin ETFs in 2024, pushing the price of Bitcoin to a new all-time high above $73,000 in March!
The company represents an unparalleled way for traditional investors to gain exposure to DeFi protocols in a secure, compliant manner without the complexities of a crypto account.
From Zacks Small Cap Research:
A Diversified Platform Focused on Digital Assets, DeFi, and Web3: DeFi Technologies’ mission is to provide investor access to and capitalize on the innovation, value, and high growth of leading decentralized technologies primarily through introducing and managing digital asset ETPs, as well as identifying, investing in, and developing companies focused on the decentralized finance and Web3 ecosystems. Stepping back, decentralized finance (DeFi) applies the model of digital assets (decentralized blockchains to validate and track transactions/ownership) to the world of traditional financial services. Decentralized applications (dApps) run on public blockchains and provide financial services without centralized gatekeeps/toll takers. As a result, decentralized finance apps provide banking, borrowing, lending, trading, and insurance (amongst other services) within a more accessible, timely, cost efficient, secure, and transparent platform. Web3 takes the concept a step further and applies the decentralized blockchain groundwork to the internet.
Crypto Going Mainstream: To be sure, the biggest news to hit the crypto industry this year (or for many years) was the SEC approval and subsequent launches of Bitcoin (BTC) and Ethereum (ETH) Exchange Traded Funds (ETFs) here in the U.S. Beyond record-breaking asset growth, the BTC ETF introductions garnered massive media attention/exposure, with a favorable narrative developing for the crypto industry more broadly. In turn, rising awareness and demand combined with improving accessibility continues to drive higher adoption/allocation rates across the digital assets landscape. Despite the surge in demand for cryptocurrencies via BTC ETFs, a majority of Bitcoins remains held by retail investors. The key to a step function in growth remains rising crypto allocations from institutional investors (pensions, Sovereign Wealth Funds, and insurance companies). While we are still seemingly in the very early stages, a sustainable Bitcoin bull market likely facilitates a shift in institutional allocations. We expect BTC and other cryptocurrencies to continue to broadly outperform more traditional asset classes over time reflecting several powerful tailwinds/catalysts including ongoing ETF inflows, a more favorable interest rate backdrop (at some point), and slowing supply post the recent BTC halving.
ETP Head Start: DeFi Technologies’ subsidiary Valour Asset Management is a leading ETP issuer in Europe, with a broad array of single-asset and multi-asset class products. From a competitive positioning perspective, Valour focuses on niche markets, with investment performance track records and trading/issuance capabilities in local currencies across Germany, France, Amsterdam, and Scandinavia. Despite rising competition, Valour remains well positioned to continue to gain market share reflecting in house management expertise, regulatory approvals to list ETPs on major exchanges across Europe, and a focus on Alt Coins. Looking ahead, we expect Valour ETP AUM to continue to grow fueled by ongoing new product development. Incremental ETP launches likely extend beyond digital assets, with thematic and active strategies key areas of focus. Furthermore, management remains focused on broadening Valour’s geographic footprint, particularly in jurisdictions maintaining favorable regulatory frameworks and high crypto adoption rates (see the Middle East and Asia), via organic initiatives and/or strategic partnerships and joint ventures.
Unlike traditional asset managers that rely almost exclusively on management fees, DEFTF generates revenue across staking, lending, and trading underlying digital assets in addition to ETP management fees. The company’s proprietary trading desk is also adding another powerful revenue driver.
Management has upped revenue guidance for 2024 from $87 million last quarter to $131 million. Zacks SCR is calling for revenue to hit $146 million this year!
1. Involved in rapidly growing spaces.
⁃ The fintech sector is experiencing significant expansion. BCG expects fintech to reach a market size of $1.5 trillion in revenue by 2030—growth of roughly five times from today.
⁃ Decentralized finance (DeFi) is a network of peer-to-peer financial services that uses blockchain technology to allow users to make financial transactions without traditional intermediaries like banks. DeFi is an emerging field that's gaining popularity as an alternative to traditional financial services.
2. Research coverage by analysts at Zacks Small Cap Research and Benchmark Company.
⁃ In late August Benchmark analyst Mark Palmer raised its price target on DeFi Technologies to C$4 from C$3 and kept a “BUY” rating on the shares.
3. A management team of experts in financial markets, digital assets and capital markets technology.
4. Advisors who are pioneers in FinTech, blockchain and digital assets makers.
5. A total of $44.1M (US$32.6M) venture portfolio investments as of June 30, 2024.
6. A strong financial position marked by C$56.2M cash on hand (As of August 7th, 2024).
7. Q2 2024 financial results revealed the company’s strongest financial quarter to date.
8. Projection of annualized revenues for fiscal 2024 of approximately C$179 million ($131M).
9. Strategic advancements and product launches.
10. The launch of first ETPs on Spotlight Stock Market: DeFi Technologies' subsidiary Valour Inc. introduces the world's first CORE ETP and expands the world's first Hedera (HBAR) ETP to the Spotlight Stock Market, marking the first ETP offerings on this exchange.
Your Gateway to Digital Assets: Gain access to the rapidly expanding digital assets sector, including decentralized finance (DeFi) and Web3. The company’s unique business model offers investment exposure without the need for a separate crypto wallet or account.
Publicly Traded Advantage: DeFi is one of the only publicly traded companies purpose-built to provide direct exposure to nascent digital asset markets. It represents an unparalleled way for traditional investors to gain exposure to DeFi protocols in a secure, compliant manner without the complexities of a crypto account.
Regulated Equity Instruments: DeFi captures the upside of the future of finance by offering regulated equity instruments. By doing so, it mitigates the risk and provides a sense of security, making it an ideal choice for those who are hesitant to step into the digital asset space due to regulatory concerns.
Digital assets began with Bitcoin back in 2009. Now roughly fifteen years later, the market has grown exponentially to encompass a dizzying array of coins, blockchains, payment processors.
Digital assets are transforming the financial system, and traditional investors should be able to invest in these digital assets!
This includes cryptocurrencies in a trusted and secure manner, without creating a separate brokerage or bank account.
Leading crypto coins have shown robust stability in the year 2024. On March 14, bitcoin hit a new all-time high of $73,798, surpassing its prior record of $68,990 set in November 2021. The world's largest cryptocurrency rebounded about 157% in 2023. Bitcoin is up about 44% so far this year as of August 2024.
Leading crypto coins have shown robust stability in the year 2024. On March 14, bitcoin hit a new all-time high of $73,798, surpassing its prior record of $68,990 set in November 2021. The world's largest cryptocurrency rebounded about 157% in 2023. Bitcoin is up about 44% so far this year as of August 2024.
Analysts estimate that the global cryptocurrency market will more than triple by 2030. This all leads to the idea that many digital assets will become household names – and quickly.
DeFi Technologies Inc. is a financial technology company that pioneers the convergence of traditional capital markets with the world of decentralized finance (DeFi). With a dedicated focus on industry-leading Web3 technologies, DeFi Technologies aims to provide widespread investor access to the future of finance. Backed by an esteemed team of experts with extensive experience in financial markets and digital assets, the company is committed to revolutionizing the way individuals and institutions interact with the evolving financial ecosystem.
The company captures the upside in the explosive growth of digital assets like Bitcoin, Ethereum, Solana and other Web3 protocols via regulated equity instruments.
DEFTF is one of the only publicly traded companies built to give investors direct exposure to these nascent markets in a regulated, secure manner in the following ways:
The landscape for decentralized finance is continuously transforming, building upon and improving traditional financial offerings. From lending and borrowing markets to automated market makers and high yield liquidity pools, the financial giants of tomorrow are innovating on the blockchain today.
Working with world leading names across the DeFi space, DEFTF’s research-based early-stage venture arm backs ambitious founders and high potential projects and networks across decentralized finance and Web3.0, focusing on Pre-Seed to Series A ventures.
Trusted and Familiar Investment Vehicle: DeFi Technologies is a publicly traded company that gives you digital asset and Web3 exposure through your brokerage account.
Aggressive Revenue Model: Utilizes multiple income streams such as trading and management fees, staking, lending earnings, and strategic partnerships within the digital asset and DeFi sectors to maximize revenue generation.
Diversified Digital Asset Exposure Bitcoin accounts for only 51% of the digital asset market: DEFI Technologies offers investors broader exposure beyond Bitcoin, including significant opportunities in the decentralized finance and Web3 sectors, which are typically inaccessible through public markets. This approach enables qualified investors to tap into the extensive $2.4 trillion sector comprehensively.
Growth Sectors Focus: Provides direct exposure to the fast-growing sectors of Exchange-Traded Products (ETPs) and cryptocurrencies, leveraging innovative financial instruments and market trends in DeFi and Web3 technologies.
About Valour:
Valour Inc. and Valour Digital Securities Limited, issues exchange traded products ("ETPs") that enable retail and institutional investors to access digital assets like Bitcoin in a simple and secure way via their traditional bank account. Valour is part of the asset management business line of DeFi Technologies Inc.
In addition to their novel physical backed digital asset platform, which includes 1Valour Bitcoin Physical Carbon Neutral ETP, 1Valour Ethereum Physical Staking, and 1Valour Internet Computer Physical Staking, Valour offers fully hedged digital asset ETPs with low to zero management fees, with product listings across European exchanges, banks and broker platforms.
Valour's existing product range includes Valour Uniswap (UNI), Cardano (ADA), Polkadot (DOT), Solana (SOL), Avalanche (AVAX), Cosmos (ATOM), Binance (BNB), Ripple (XRP), Toncoin (TON), Internet Computer (ICP), Chainlink (LINK) Enjin (ENJ), Valour Bitcoin Staking (BTC), Bitcoin Carbon Neutral (BTCN), Valour Digital Asset Basket 10 (VDAB10) and 1Valour STOXX Bitcoin Suisse Digital Asset Blue Chip ETPs with low management fees.
Valour's flagship products are Bitcoin Zero and Ethereum Zero, the first fully hedged, passive investment products with Bitcoin (BTC) and Ethereum (ETH) as underlyings which are completely fee free.
Valour’s financial highlights:
Valour in the news:
ETPs provide investors with several benefits over buying crypto directly.
DeFi Technologies and Valour are committed to building a sustainable future for its investors, the decentralized finance ecosystem and beyond.
Valour Bitcoin Carbon Neutral ETP provides investors with sustainable and climate-friendly exposure to Bitcoin. The carbon neutral ETP presents a trusted investment option which benefits the environment and aligns with ESG goals by funding certified carbon removal and offset initiatives in order to neutralise the associated bitcoin carbon footprint. Innovation lies at the core of Valour’s proposition.
Working with our partner Patch, we have developed a proven route to decarbonize the footprint of our Valour BTC Carbon Neutral ETP. In doing so, Valour has identified and reviewed industry benchmarks and best practices to ensure that all aspects of the structure follow the latest research principles and actionable recommendations. Abiding by the highest standards and deploying a methodology that most accurately calculates the emissions relating to Bitcoin, Valour stands at the forefront of the crypto industry, promoting sustainable development through proven quality carbon avoidance and removal projects.
As a Crypto Climate Accord (CCA) supporter, DEFI has committed to supporting the CCA’s objectives and to helping advise, develop, and scale solutions in support of the CCA and ESG compliance. The CCA’s overall objective is to decarbonise the global crypto industry by prioritizing climate stewardship and supporting the entire crypto industry’s transition to net zero greenhouse gas emissions by 2040.
On August 14th, 2024, DeFi Technologies announced its financial performance for the three and six months ended June 30, 2024 (all amounts in Canadian dollars, unless otherwise stated).
"Q2 2024 represents a transformative period for DeFi Technologies, setting new benchmarks for financial performance and strategic growth. Our record revenues of $133.2 million (US$98 million) and net income of $90.4 million (US$66.5 million) for the quarter reflect the strength of our business model and the success of our recent strategic initiatives.
For the quarter, we not only delivered exceptional financial results but also significantly advanced our market position through key product launches, partnerships, and the expansion of our digital asset ETP offerings.
A pivotal highlight of this quarter was the launch of DeFi Alpha, our specialized arbitrage trading desk, which generated over $111.5 million (US$82 million) in Q2 2024. This new venture has rapidly become a significant revenue driver, showcasing our commitment to innovation and adaptability in the dynamic digital asset landscape.
Additionally, we strategically paid down US$29.5 million in outstanding loans, strengthening our balance sheet and increasing our digital asset collateral for revenue generation. Our digital asset treasury strategy remains robust, with holdings of 204.34 BTC, 12,775 SOL tokens, and 1,484,148 CORE tokens, enabling us to participate in the appreciation of digital assets while supporting our staking and yield-generating activities.
The 43.7% growth in AUM to $730.1 million as of June 30, 2024, and further growth to $837 million by July 31, 2024, underscores our ability to adapt and thrive in the rapidly evolving financial technology landscape. As we continue to innovate and lead in the regulated digital asset space, these achievements reinforce our commitment to delivering long-term value to our shareholders.”
Bitcoin is most likely to remain popular with cryptocurrency speculators over the next decade. Bitcoin the blockchain will probably continue to be developed to address long-standing issues like scalability and security.
Many analysts are calling for Bitcoin’s price to explode further. Notably, Cathie Wood, CEO of Ark Invest, predicted that the digital coin could reach an astounding $1.48 million by 2030.
As the rise of digital assets continues to dominate the market, the development of deFi, or decentralized finance, is imminent.
As in direct relation to cryptocurrency, deFi describes the offering of various financial instruments without the intermediary need of a traditional bank, brokerage, or exchange. Companies in this arena have the potential to disrupt traditional banking and finance through blockchain and cryptocurrency technologies.
DeFi Technologies Inc. (OTC: DEFTF) stands at the forefront of offering institutional grade exposure to digital assets through issuing of ETPs, trading, strategic ventures, and Web3 infrastructure.
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