Landmark cryptocurrency legislation signed into law by U.S. President Donald Trump last week gives the fast-growing global crypto industry new legitimacy while making it easier for investors to gain exposure to the sector in a safe way, an expert says.
“It gives clarity, simplicity and lets everybody understand what the rules of the playing field are,” Andrew Forson, president of Toronto-based DeFi Technologies, told BNN Bloomberg in an interview on Wednesday.
“That encourages innovation without fear of inadvertently triggering a securities law or breaking some sort of rule that would make it really, really difficult for the business to recover from.”
The legislation, known as the GENIUS Act, is a major step toward legitimatizing the crypto industry in the eyes of the U.S. government through overarching rules and regulations. But the law’s impact will reach far beyond American crypto markets, said Forson.
“The U.S. is without a doubt the largest capital market in the world, and whenever they provide a degree of regulatory clarity, it makes it easier for everybody worldwide,” he explained.
The rise of cryptocurrency trading has led to increased demand from investors looking to gain exposure to the industry without taking on the risk and volatility it’s historically been associated with.
Crypto-linked exchange-traded funds (ETFs) have began popping up on exchanges around the world in recent months, offered by financial services companies like DeFi.
“DeFi Technologies and our wholly owned subsidiary Valour is probably one of Europe’s most significant or prominent digital asset exchange-traded product (ETP) issuers,” Forson said.
“In particular, we have 78 digital asset-underlying ETPs listed on over eight exchanges throughout the world, and one of the big benefits of this is it makes it a lot easier for institutions and retail investors to gain exposure to digital assets in their investment portfolios.”
Forson said he acknowledges that there will likely continue to be a certain amount of hesitancy towards cryptocurrency from some investors given the numerous instances of fraud in the industry over the years.
The most notable example being the high-profile collapse of popular crypto exchange FTX in 2022, which led to fraud charges being brought against founder Sam Bankman-Fried. He eventually was found guilty and is currently serving a 25-year prison sentence.
“That actually is one of the reasons why DeFi… (is) so well positioned to help institutions and individuals gain real exposure to the digital asset space, with broad exposure across many, many digital assets beyond just bitcoin, in a safe and regulated manner,” said Forson.
Shares in DeFi itself, which were changing hands at around US$3 per share in midday trading on Thursday, are cheaper than they should be, Forson argued, noting that the company is profitable and has many avenues for future growth.
“I can unequivocally say that we are undervalued. We should be trading at a higher multiple than we are… we are a profitable company, we actually make real money and (will) continue to do so into the foreseeable future,” he said.
“Just a few days ago, we hit the US$1 billion assets under management metric, which is always a nice threshold to reach, with the assets that are held by Valour, and DeFi Technologies itself is also involved in a number of other areas including a corporate venture capital portfolio.”
