Interesting company, I am just wondering.
Peter
DEFI has an asset management business which can provide fairly steady fees over time, as the assets in its funds are somewhat 'sticky', but its price gains mostly came from its expansion into new businesses (acquired a crypto research firm, expansion into new markets), as well as significant gains from its arbitrage trading desk. Its trading arm, DeFi Alpha Strategy, generated significant gains in Q2 2024 as the broader crypto market moved materially higher. These are more 'lumpy' revenues than its ETP business, but it also helped to boost its balance sheet, which led to price expansion. With crypto assets rising materially over the past couple of years, the assets in its funds have also experienced growth, and this has scaled up its fee revenue.
Its price expansion has been large, but many of these 'crypto proxy' companies can be viewed as a levered play on digital assets, and thus when the crypto space moves higher, these names can see higher gains due to their smaller size and ability to scale up quickly.