State of the Market:
The start of Q2 has been characterized by an extraordinarily stable crypto market despite its overall size having fallen to $1.8tn from the previous month. Bitcoin dominance has remained relatively stable at 40% alongside a slightly reduced 30 day volatility of 2.15%, both of which have set the tone for the rest of the market.
In spite of the falling prices, other market indicators have remained constant with Arcane Research reporting continuous private capital inflows into the industry. To date, 2022 has seen more than 36 crypto capital raises of over $100m, with Circle’s recent $400m raise topping the chart for April.
When assessing the wider DeFi market, several indicators can be used to determine its state. Although the market cap fell 17.2% from March, the decrease in total value locked (TVL) across the DeFi landscape stood at 4.1%, down from $216.7bn to $207.9bn, according to figures from The Block. Taking DeFi dominance as a percentage of the total market cap into consideration, April’s figure of 1.2% is slightly higher than that of March’s close, maintaining its balance in the overall picture despite the fall in TVL.
With the U.S. GDP shrinking by 1.4% and the CPI currently at 8.5%, it is almost certain that interest rates will increase in an attempt to prevent further declines. As access to capital is reduced, funds will no longer be able to ride the liquidity wave, resulting in crypto’s status as a risk asset vs inflation hedge being put to the test.
In the News:
A report published by Citi estimates the total addressable market of the Metaverse economy to reach $8tn - $13tn by the year 2030.
Chip manufacturer Intel launches its Blockscale ASIC mining chip, becoming one of the most energy efficient on the market.
Amidst its plans to become a leader in digital asset regulation, the UK Treasury has tasked the Royal Mint with creating its first NFT.
HSBC launches its Metaverse fund to private banking clients in Asia.
Online checkout provider Bolt agrees to acquire Wyre Payments for $1.5bn to integrate online crypto payments.
Goldman Sachs predicts large growth in blockchain-exposed stocks following recent correlation with equity index returns.
Block’s Cash App announces new service integrations, including incoming Lightning Network payments and automated Bitcoin paycheck investments.
Robinhood moves its crypto wallet out of beta, enabling eligible customers to make digital asset transfers in the investment app.
Strike announces its partnership with the point-of-sale supplier NCR and Blackhawk payments, to integrate Bitcoin’s Lightning Network into Shopify’s global network of merchants.
Fortnight creator, Epic Games, receives $2bn funding from Sony and KIRKBI to accelerate its Metaverse expansion.
Circle secures funding from BlackRock, alongside the firms’ strategic partnership to explore market applications for the USDC stablecoin.
Stripe enables USDC payments in its Connect payout platform via the Polygon (MATIC) network.
Fidelity Investments set to allow investors to put Bitcoin in their 401(k) retirement savings later this year.
The Central African Republic becomes the second country to adopt Bitcoin as legal tender, following El Salvador’s adoption in 2021.
Panama’s National Assembly passes a bill to allow the private and public use of digital assets, including crypto-based tax payments.
DeFi Tech’s Monthly Overview:
April saw new listings for Valour’s Polkadot, Solana and Cardano ETPs on the Euronext Paris and Amsterdam exchanges. Following Valour’s admission to the Swiss VQF, the company will be able to offer digital assets directly to businesses and institutions, accessing an even larger part of the institutional market. With DeFi Technologies’ recent listing on the U.S OTCQB market, the company has continued its expansion within and across markets, opening up new liquidity opportunities for its continued innovation as we go into Q2 of 2022.
Apr 01:DeFi Technologies Announces Fiscal 2021 Financial Results with Total Revenue Up 411% (Year-on-Year) DeFi Technologies announced its financial results for the fiscal year ending 2021. As at the year’s close, total revenues stood at $15.1m, up 411% from the year prior. DeFi Technologies’ wholly owned subsidiary, Valour, achieved $363m in AUM across the company’s portfolio of ETPs, having launched the world’s first Uniswap ETP on the NGM and Frankfurt Exchange. This growth reflects the strong demand for Valour’s exchange traded products, paving the way for additional innovative Web3 product launches in the year ahead.
Apr 05:DeFi Technologies Joins $45M Raise for Ethereum Scaling Solution, Boba Network DeFi Technologies announced its participation in Boba Network’s $45m Series A raise, which values the Ethereum Layer-2 Optimistic Rollup scaling solution at $1.5bn. With widespread participation from firms including Hack VC, GBV, Shima Capital as well as the likes of The Graph, ANKR, Quantstamp, Crypto.com, Huobi and others, the raise will enable Boba to build out the ecosystem, bringing the power of Web2 on-chain through the network’s Hybrid Compute platform.
Apr 06: DeFi Technologies Expands Valour's Polkadot, Solana, and Cardano ETPs to Euronext Exchange Trading for Valour’s low-fee Polkadot (DOT), Solana (SOL) and Cardano (ADA) ETPs was expanded to the Euronext Paris and Amsterdam exchanges. These additions enable greater European retail and institutional investor access to this emerging asset class via regulated equity exchanges, highlighting DeFi Technologies’ commitment to bridging traditional capital markets and decentralized finance.
Apr 11: DeFi Technologies Subsidiary Valour Approved for Swiss VQF Membership Valour has been admitted to The Financial Services Standards Association through the VQF membership awarded to its subsidiary, DeFi Europe AG. Supervised by FINMA, the membership serves as assurance of DeFi Europe’s compliance of Swiss anti-money laundering legislation, bringing additional layers of trust and transparency to its users.
Apr 19: DeFi Technologies Commences Trading on the OTCQB Market (US) Trading for DeFi Technologies’ common shares commenced on the OTCQB Venture Market in the United States. This additional listing reflects the company’s expanding presence in the North American market. Under the symbol ‘DEFTF’, US investors can easily invest in the company, gaining exposure to leading Web3 and decentralized finance (DeFi) protocols.
Our portfolio companies have had a busy month building out their products and working on new partnerships. We’ve outlined some key takeaways from several of our portfolio companies for the month of April.
Blocto released their Q1 metrics citing 10% month-on-month unique user growth, up 130% from Q4 of 2021, with a total AUM of $1bn.
Boba Network closed a $45m Series A round at a $1.5bn valuation to fund its next phase of growth. Investors in the round include DeFi Technologies, Hack VC, GBV, Shima Capital as well as the likes of The Graph, ANKR, Quantstamp, Crypto.com, Huobi and others.
CLV launched CLV EVM to enable the seamless collaboration and porting of projects to CLV. This follows the successful launch of the CLV Mainnet Validator program in which more than 135m CLV was staked, and recent strategic partnerships with Etherscan, Multichain and Amara Finance.
Oxygen co-sponsored the Miami Solana Hacker House before announcing the launch of the OXY staking program. With staking options available both on and off-chain, users can earn up to 15% APY, with staking through CEXs and custodians in the works.
Saffron submitted their V2 whitepaper for review after the successful relaunch of their website and the latest iteration of the Saffron Academy. The intuitive resource repository allows users to deep dive into the Saffron ecosystem, with articles, tutorials and dev updates consolidated in one place.
Sovryn launched its MYNT bonding curve app on mainnet. As part of Sovryn Labs, MYNT is an aggregator protocol for BTC-backed stablecoins, enabling users to always purchase given tokens at a specified, formula-driven price.
Wilder World introduced the WW DAO to enhance governance voting in the Wilder World ecosystem. Users staking in WILD staking pools will be able to propose and vote on transactions, whilst the Wilder NFT staking system will enable DAO industry earnings to flow back to citizens.
The 2022 Annual and Special Meeting of Common Shareholders: When: Friday, May 6th, 2022 at 10:00 a.m. (Toronto time)
Where: 198 Davenport Road, Toronto, Ontario, Canada, M5R 1J2
The purpose of the Meeting is as follows:
1. Financial Statements. Receive and consider the audited consolidated financial statements as at and for the fiscal year ended December 31, 2021; 2. Auditor Appointment. Appoint RSM Canada LLP as auditor of the Corporation; 3. Elect Directors. Consider and elect the directors for the ensuing year; 4. Name Change. The Corporation is proposing to change its name to “1Valour Inc.”; and 5. Other Business. Consider other business as may properly come before the Meeting or any postponement(s) or adjournment(s) thereof. Shareholders and/or their appointees may participate in the Meeting by way of conference call however votes cannot be cast on the conference call. Please register at https://us02web.zoom.us/meeting/register/tZclfu-trz4vG9VhQ2b-a-Km722ufDxTcwW2. Electronic copies of the Meeting materials may be obtained under the Corporation’s profile on www.SEDAR.com
Press & Media Highlights:
DeFi Technologies’ Chief Strategy Officer Diana Biggs featured in The Wealth Mosaic’s 2022 WealthTech report on DLT and Blockchain technology. The profile discusses the role of the technology in reshaping asset and wealth management, and the solutions DeFi Technologies provides in the evolving space.
Fortune cited CEO Russell Starr on Bitcoin’s use as an inflation hedge rather than a risk asset, as Bitcoin trade volumes fall following the Federal Reserve’s interest rate rise to combat record high inflation levels.
Russell was further quoted by Bloomberg in reference to increasing investor diversification as Bitcoin dominance continues to fall from 65% (in 2020) to 40% (in 2022). Whereas the cause of these changes was once referred to as ‘altcoin season’, the revolution of the market has seen an increase in products that facilitate investor access to the evolving digital asset space.
In a letter co-organized by Diana and addressed to EU Ministers and European Parliament, more than 40 leading Web3 organizations conveyed concerns with the recently proposed EU MiCA and TFR regulations. With measures that go beyond the scope of the FATF Travel Rule, the recommendations carry potential unintended negative consequences for citizen privacy and Europe’s competitiveness in the future of the internet. The initiative was covered by Reuters and Cointelegraph, and Diana was interviewed by Borse Zeitung and LendIt Fintech on the topic.
Valour’s launch of its Cardano (ADA), Polkadot (DOT) and Solana (SOL) ETPs on the Paris and Amsterdam Euronext was covered by Bloomberg, with CEO Russell Starr highlighting the importance for innovation and the value-add for investors.
Valour was nominated by Financial News for the Excellence in Trading & Tech Awards 2022. The awards celebrate the companies that stand out for the strength of their business in Europe, with Valour’s nomination in the ‘Startup of the Year' category.
In the latest episode of our Firechat series, CEO Russell Starr and advisor Teeka Tiwari discuss DeFi Technologies’ listing on the OTCQB and the regulatory process involved. Their chat provides an update on the company's plan for a NASDAQ uplisting and the precedent it sets for others in the industry. Other topics covered include the necessity of coupling TradFi and DeFi to ensure mass adoption, Valour’s nomination for FN’s top financial startup, and the current state of the market.
Upcoming Speaking Events: May 16-17: AIM Summit(Russell Starr) May 23-26: H.C. Wainwright Global Investment Conference (Russell Starr) June 02-03: Crypto Valley Conference (Diana Biggs) June 07-09: LD Micro Invitational XII (Russell Starr) June 15-16: BattleFin Discovery Day New York (Russell Starr)
As we round up the previous month, we look at the latest figures for Valour’s suite of Exchange Traded Products (ETPs).
For the month ending April ‘22, Valour’s total assets under management (AUM) stood at $245m USD. Although this figure reflects a slight decrease from the month prior, this change can be attributed to external macroeconomic conditions and the wider state of the market. Overall sentiment remains positive with net sales continuing to increase to $329.9m USD. Valour’s joint venture with SEBA Bank AG and VQF membership approval should see the launch of further innovative products in Q2, bringing further value to investors and the market as a whole.
For more information on products and offerings, visit: https://defi.tech/.
This Newsletter is for informational purposes only and does not constitute, either explicitly or implicitly, any provision of services or products by DeFi Technologies or its subsidiaries, nor does it constitute investment advice. DeFi Technologies Inc, and its affiliates, is not soliciting any action based on the content provided. Investments involve risk and investors should determine whether any particular product or service is suitable for their particular situation and/or seek professional advice. Past performance is not an indicator of future results and your capital is at risk. For a full disclosure, please refer to ourTerms & Conditions.