Bitcoin Buying Firm DeFi Technologies Defends Business Following 35% Plunge

DeFi Technologies issued a vigorous defense to justify its business following a report by CoinSnacks questioning. The Bitcoin buying firm suffered a 35% correction following a report claiming gains are unjustified. 

DeFi Technologies stock suffered a huge correction that nearly eroded the gains that catapulted it to the high-flying stake. The crash is attributed to a disclosure by a crypto newsletter that questioned whether the Bitcoin purchases were for the right reasons.  

The stock plunge prompted DeFi Technologies to lodge a strenuous defense to downplay the skepticism about its business.  

DEFI Stock Plunge

The CoinSnacks in its Tuesday issue revealed an extensive marketing campaign that DeFi Technologies undertook to draw positive coverage. The Toronto-headquartered company is listed on Canada’s Chicago Board Options Exchange (CBOE) and is involved in crypto fund provision. 

DEFI stock has replicated the trend by other companies adopting Bitcoin as a treasury reserve asset to peak numbers. The Canadian firm replicates Michael Saylor’s MicroStrategy (MSTR) which now tops the corporate holders of Bitcoin. 

Analysts questioning the bullish call on DEFI despite the prevailing excitement. The analysts cited fundamental reasons instead arguing it is supremely undervalued.

A reflection of market activity illustrates that DEFI which traded for CAD 3.30 on Monday lost the 202% uptrend since May 31. The DEFI suffered a 35% correction to exchange hands at CAD 2.24 on Tuesday and per share.

CoinSnacks’ Misleading and Erroneous Statement

CoinSnacks revealed that the company deployed promotional efforts that featured a paid email alongside the influencer campaign to capture it within the headlines. 

The company tapped endorsements from Anthony Pompliano alongside fellow crypto investor Will Clemente. The latter is behind market analytics firm Reflexivity Research which DeFi Technologies acquired in January. 

CoinSnacks indicated that the stock rally is not driven by the right reasons. Instead, there is strong evidence of influencer pumps, sustained mentioning on CNBC and email campaigns presides the Pomp pomping. 

DeFi Technologies issued a press release responding to the CoinSnacks report as selective, inaccurate, and defamatory. The firm added that the report captures misleading statements regarding its practices and financial health. 

DeFi Technologies attributed the report as one commissioned by the short-sellers who aimed at depressing the stock’s price. 

The company recalls the June 10 incident when approached by a Canadian investment bank offering a US $15M deal citing its newfound strength in its treasury and absence of urgency to raise additional funds. DeFi Technologies would on the material day disclose holding US $51M in cash and US $7.9 million in 110 Bitcoin. 

DeFi Technologies lament the coordinated input by short-sellers sponsoring misleading reports, thus manipulating the market. CoinSnacks disputed engagement with short-sellers to cover any entity.

DeFi Technologies Financial Condition

Notably, DEFI stock had recovered from the dip to realize a 6% rebound to exchange hands at CAD 2.30 apiece on Wednesday. A Thursday, June 20 statement from Benchmark analyst Mark Palmer noted that the DEFI stock plunged by 17% in early trading to CAD 1.93 and later regained to hover near CAD 2 as per TradingView data. 

The report referenced last year terming DeFi Technology as a penny stock. The CoinSnacks newsletter revealed the company incurred a CAD 18.9 million loss last year. 

DeFi Technology downplays the erroneous reporting indicating a massive rise in the assets under management coincidentally with the surge witnessed in the broader crypto market. The latter boosts earnings from crypto funds investment at an average yield of 7-10%. 

Capital markets executive at the company Russell Starr reports that its assets ranged from $400M to $450M in the first quarter. It projects to realize $600M – 650M of assets on average in the second quarter.

DeFi Technologies revealed that the AUM yielded US $10M in revenue in the initial quarter sufficient to pay off annual expenses. Starr reports that the AUM is 50% up and thus expects to earn $15M in each of the subsequent quarters in profit. 

Starr added that the recently unveiled DeFi Alpha trading desk yielded $85M in 2024’s quarter 2 alone. The earnings raise the six-month net profits to $100M representing 20% of the company’s $477M market value. 

Starr contextualized that other crypto-linked stocks, including Robinhood and Coinbase, have their stock trading 40X and 30X annual profits. The executive criticized the article for the apparent failure to capture fundamentals.