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I remember finding the company WonderFi very interesting even before it went public on the Canadian stock exchange. One of its biggest investors is Kevin O'Leary from shark tank which is the reason that it came onto my radar in the first place. The idea behind the company is great. Decentralized Finance (DeFi) is something I am very much a fan of, and WonderFi was started to make it easier for the average person to take advantage of DeFi. For people that don't know, DeFi essentially is when people put their money into a stable coin (a crypto that follows the U.S. dollar) and collects interests off of it. WonderFi is essentially the bank. People hold their stable coins in WonderFi, and WonderFi loans out that money. WonderFi takes the interest they made off of that money and gives the owner of the money part of the profit as a thanks. It's basically banking without a bank which is something I am very bullish on.
When WonderFi first went public, I didn't invest any money into it as I didn't know how the market would actually react to the idea. I did, however, add it to my watchlist, and I have been checking on the stock every now and then to keep up with it. I even made an account with them, but I haven't actually done anything with it yet.
Since going public, WonderFi bought several companies like BitBuy, Coinberry, and Blockfoundry. Once they started doing this, I started viewing them as almost like a holding company for crypto companies. Unfortunately, however, the company has seen a massive decline in value since going public. They have lost 89.71% of their value since going public in 2021.
There are several reasons why I believe this has happened. First, crypto entered a massive bear market pretty soon after WonderFi went public. Many crypto companies went out of business during that time, and many investors pulled out of crypto themed companies like WonderFi. Second, the stock market itself entered a downturn. Investors were pulling out of the market itself. They were especially pulling out of high-risk investments like WonderFi. WonderFi now trades at just a $43.52 million valuation. Now, that's not a ridiculously low valuation considering in Q1 of 2023 WonderFi made just $2.5 million in revenue, but it is still really low compared to where they once were.
Now, it has been announced that WonderFi will be merging with Coinsquare and CoinSmart. These three companies will combine to be Canada's largest regulated cryto asset trading platform. Hopefully, they'll have success.
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