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  5. DEFI: What are your thoughts on DeFi Technologies Inc. [A]
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Q: What are your thoughts on DeFi Technologies Inc.? Recently has been on a significant SP appreciation trend. Limited analyst coverage or commentary outside of company releases.
Asked by Brian on June 11, 2024
5i Research Answer:

For the most recent quarter, DEFI reported operating revenues of $13.4M and operating net income of $5.3M. Its AUM grew significantly, driven by a favourable crypto environment, new product launches and strategic decisions that grew trading volumes. Management expects its annualized operating revenues to reach $119M for FY2024, supported by AUM growth, upcoming Exchange Traded Products (ETP) launches, and the integration of new acquisitions. It also announced a specialized arbitrage trading desk, called DeFi Alpha, which generated $113.9M in Q2 from low-risk arbitrage trades. This along with its recent results have helped to fuel its recent price momentum. Although, it remains cash flow negative and is highly dependent on a strong crypto backdrop. We like its momentum and the introduction of its new trading desk, but it is highly volatile and we would prefer to see stability in its margins before proceeding here. Overall, we prefer a larger name that is involved in crypto trading, GLXY.