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Shares of Canadian fintech firm DeFi Technologies (DEFTF) have surged more than 25% this week after the company’s cryptocurrency trading desk kicked off July with another round of huge profits.
The company’s shares skyrocketed to $1.64 on Wednesday, up from $1.27 on July 11. The stock price has since corrected along with Bitcoin’s price to $1.47 at the time of writing, but is still up 15.4% since then, outpacing BTC itself.
Most of DEFTF’s gains came on Tuesday, when the company announced had generated $14.1 million in “low-risk arbitrage trades” at its specialized trading desk, DeFi Alpha, since the start of the third quarter. This includes $2.9 million in Tether (USDT) and $11.2 million in “digital asset inventory.”
“The company has already generated approximately $105 million in revenue with approximately $10 million in annual costs with second quarter revenue yet to be announced,” said Curtis Schlaufman, vice president of communications at DeFi Technologies. Decipher“This success highlights the effectiveness of our strategic business operations.”
Such revenue figures are significantly high compared to the company’s total market capitalization, which currently stands at $429 million, according to Yahoo FinanceProminent cryptocurrency market analyst Will Clemente has repeatedly argued that the company is both “misunderstood” and “undervalued” at its current valuation.
Clemente’s market research arm, Reflexivity Research, was acquired by DeFi Technologies in January.
While DeFi Alpha has driven the majority of DeFi Technology’s gains this year, Schlaufman said their “core business” is still centered around Valour, their asset management subsidiary that provides dozens of cryptocurrency exchange-traded products (ETPs) in Europe.
Thanks to looser regulations in the region, Valour offers ETPs for dozens of cryptocurrencies outside of North American markets, including Solana (SOL), Cardano (ADA), and most recently Near (NEAR). It can also stake tokens within those funds, giving them much higher returns per deposit than U.S. Bitcoin ETFs.
“We have ambitious plans to continue to expand our ETP offering and enter new and emerging markets, including the Middle East, Asia and Africa,” Schlaufman said.
Last month, DeFi Technologies told Decrypt that it expected to earn $15 million per quarter only from Valour after the first quarter. However, forecasting the company’s entire profit can be difficult: “At the end of the first quarter, the company had forecast $87.45 million in revenue for 2024, which it has already surpassed,” Schlauffman continued.
Using this year’s new profits, DeFi Technologies expanded its balance sheet, reduced debt, and bought back its own shares.
In particular, the company has joined a number of MicroStrategy Imitators in making Bitcoin its “primary treasury reserve asset,” purchasing 110 BTC for $7.6 million at the time. Like similar companies, DEFTF shares soared to multi-year highs following the announcement.
“We will continue to add more BTC as our Bitcoin treasury strategy needs,” Sclauffman confirmed.
By Ryan-Ozawa.
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