DeFi Technologies Inc. (Nasdaq: DEFT) issued a comprehensive Letter to Shareholders from CEO and Executive Chairman Johan Wattenström addressing recent share price challenges. According to the letter, management and the team take the share price decline very seriously, noting they are all shareholders themselves and feel the impact alongside investors. The company's share price has always been highly correlated with crypto market levels and activity, which in turn correlate strongly with assets under management - the dominant driver of revenue. Wattenström emphasized that the primary drivers of share price performance are a very weak crypto market, with altcoins hit significantly harder, sector rotation out of crypto equities, and technical factors mostly related to the company's capital raise. However, he noted that technical factors were one-off; our product innovation is steadily making us more unique and competitive, and when the market turns, the business is primed to deliver even higher output than during the last crypto bull market, with even greater asymmetric upside.
Despite current market pressures, DeFi Technologies has significantly strengthened its financial position since the previous crypto bear market. The company delivered record revenue and net income in 2025 and maintains a fortress balance sheet of approximately $150 million as of the end of Q1. As reported in the CEO letter, DeFi Technologies is profitable with effectively zero debt and operates a more diversified platform across Valour and Stillman Digital. The CEO highlighted that the competitiveness of our operation is only growing stronger, and we are using the weak market regime to strengthen our underlying business. The company has net inflows into Valour's ETPs year-to-date, which Wattenström views as a sign of strength in the current environment. The CEO noted that the business is considerably better positioned in this crypto bear market than it was in the previous cycle, when the company traded below $0.10 during the 2022/2023 bear market, contrasting with that period when the company carried more than $40 million of debt and was far less mature.
DeFi Technologies continues to expand its integrated platform across multiple business lines. The company's first hedge fund is expected to launch very soon, with more funds to follow pending onboarding with one additional trading counterpart, which is now underway. According to the letter, the company plans to scale arbitrage strategies in the second half of the year. The Valour Custody platform is advancing with a clearer launch target in the second half of the year, enabling new products and services to be built on top of it. Stillman Digital's growth continues despite the market climate, onboarding more and larger clients each quarter and pacing for a record year of revenue. The company is also actively sourcing and pursuing high-value, large-scale acquisitions with the CEO noting that the quality and quantity of interesting opportunities are unprecedented, though specific transaction timelines remain uncertain based on shareholder value creation criteria. AI technology has proven highly effective in optimizing the business, is now integral to daily operations, and will soon contribute directly to revenue generation.
The company faces regulatory headwinds in the EU, with Finansinspektionen, the Swedish FSA, denying approval for the UCITS structure for crypto-related assets. DeFi Technologies has appealed the decision and is working to have it overturned, though the company is now establishing a UCITS platform elsewhere in the EU as the appeal process remains uncertain. The CEO noted that launch deadlines are extended almost exclusively due to a particularly difficult regulatory landscape in the EU, which also raises barriers to entry for competitors who lack the company's hard-won experience navigating specific markets. Despite these challenges, the company's competitiveness is only growing stronger with the weak market regime being used to strengthen underlying business operations. The CEO emphasized that crypto winters present significant opportunities for us, backed by our strong balance sheet and scalable platform.
DeFi Technologies is leveraging AI technology effectively in optimizing the business, which is now integral to daily operations and will soon contribute directly to revenue generation. The company has concluded two large, successful brand-building campaigns in its core market in addition to ongoing marketing and PR activities. Looking ahead, Wattenström expressed no plans to do a reverse split unless deemed necessary and will use that option only if needed to increase share attractiveness and comply with Nasdaq framework. The CEO noted that 73% of shareholders voted in favor of the company having the option to undertake a share consolidation if needed, maintaining maximum strategic optionality for worst-case scenarios. With 73% of shareholders voting in favor of the company having the option to undertake a share consolidation if needed, the company maintains maximum strategic optionality for challenging market conditions. The team behind the first fund has effectively integrated AI for many years, developing and deploying automated, AI-driven trading algorithms, with new AI-related investment products planned for core markets to complement the crypto product range.
