DeFi Technologies (NASDAQ:DEFT) released second-quarter financial results and hosted an earnings call on Friday. Read the complete transcript below.
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Summary
DeFi Technologies reported Q2 2026 financial results impacted by lower digital asset prices, with average AUM at $471.5 million and quarter-end AUM at $397.2 million.
Valour generated $22.8 million in net inflows despite challenging market conditions, reflecting continued demand for ETPs and structured products.
The company is set to launch its first hedge fund soon, aiming to expand arbitrage strategies and institutional capabilities.
Efforts to establish a UCITS platform in the EU continue, with a parallel appeal on the Swedish FSA's decision.
Development of the Valour Custody Platform is on track for a beta launch in H2 2026, aiming to reduce third-party custody costs.
Total revenues for the quarter were $7.8 million, down from $11.2 million in the prior period, primarily due to lower AUM and unfavorable mark-to-market adjustments.
The company maintains a strong liquidity position with $119.8 million in cash and cash equivalents, despite a $20 million investment in MicroStrategy preferred shares.
The company emphasizes disciplined cost management, with operating expenses reduced to $8 million from $9.6 million in Q1 2026.
Strategic focus remains on expanding institutional capabilities, product offerings, and leveraging AI for operational efficiency and product innovation.
Management is optimistic about long-term growth opportunities and plans to capitalize on market share during the current downturn.
Full Transcript
Curtis Laughman, VP of Marketing and Communications
Hi everyone. Welcome to the DeFi Technologies Second Quarter 2026 Financial Review and Shareholder Call. I'm Curtis Laughman, VP of Marketing and Communications. Joining me on the call today are Chief Executive Officer Johan Wattstrom, Chief Financial Officer Paul Bozoki, and President Andrew Forson. We'll begin with opening remarks from Johan, followed by a review of our second quarter 2026 financial results from Paul. We will then provide an update on growth initiatives and strategic priorities from Andrew, and we'll open up for Q&A after that, a mix of retail from the chat and invite analysts to come on and ask questions live.
Before we begin, I'd like to remind everyone that certain statements made during today's call may constitute forward-looking information under applicable securities laws. These statements include, but are not limited to, comments regarding expected financial performance, business development, strategic initiatives, market expansion, product growth, and future opportunities. Forward-looking statements are based on management's current expectations and assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied.
With that, I'll turn it over to Johan.
Johan Wattstrom, Chief Executive Officer
Thank you, Curtis, and thank you everyone for joining us today. The second quarter was shaped by continued volatility across digital asset markets as lower crypto asset prices affected assets under management which, together with the mark-to-market adjustments, weighed on our reported financial results. While those market conditions impacted our financial numbers during the quarter, they have not changed our conviction in the long-term opportunity or the progress across the business.
Our focus remains on executing our strategy, strengthening the platform, and creating long-term value for our shareholders. More importantly, the underlying business continues to move in the right direction. Our core business is becoming more scalable and efficient as we invest across our existing businesses, pursue strategic opportunities, and advance product innovation. We believe these efforts are strengthening the platform, enhancing our competitive position, and expanding our long-term growth opportunities across all the business areas.
Valour has listed over 100 listed ETPs and structured products across multiple exchanges globally, aiming for another eight more during Q3. During the quarter, Valour generated more than $22.8 million in net inflows, reflecting continued customer demand for our products despite the challenging environment for the broader digital asset industry. We view these positive net inflows as an encouraging sign, demonstrating continued demand for our products despite a weaker market environment and reinforcing our confidence in the long-term opportunities ahead.
Beyond Valour, we continue to broaden our institutional platform and product offering. The launch of our first hedge fund remains a key priority. With all obstacles now removed, we are days, or at least at worst a week or two, from the actual launch. We also expect to expand our arbitrage strategies during the second half of the year with a goal of further strengthening our institutional capability and diversifying our revenue streams. While the Swedish FSA did not approve our initial UCITS structure, we have appealed the decision and are simultaneously working hard to establish a UCITS platform in another domicile within the European Union.
Those efforts are moving ahead quite quickly. Development of the Valour Custody Platform also remains on track for a targeted beta launch in the second half of the year. The initial deployment will focus on bringing custody capabilities in house, reducing third-party custody costs, and improving margins over time. The platform is expected to support a broader range of products and services. AI is also becoming an increasingly important part of our business.
We are leveraging AI to improve operational efficiency while developing AI-enabled investment products which we believe complement our existing crypto product offering and support future growth. From a financial standpoint, the company continues to operate from positional strength. Our balance sheet and liquidity provide the flexibility to invest through the market cycle, support product innovation, pursue strategic acquisition opportunities while also maintaining a disciplined approach to capital allocation.
Stillman maintains strong momentum in onboarding larger clients and remains on track for a second record year of revenue as market conditions improve. We believe the business is positioned for asymmetric upside supported by continued growth in key operating metrics that are not primarily dependent on market volatility. Looking ahead, our priorities remain unchanged. We are focused on expanding our institutional capabilities, broadening our product offering, and building a more diversified business aligned with the long-term growth of digital assets.
While near-term market conditions remain challenging, we believe the investments being made today are strengthening the business, expanding our capabilities, and positioning the company to capitalize on the next phase of growth. Our main focus during this market downturn is to aggressively take market share in our core markets. With that, I'll turn over to Paul to walk through the financial results.
Paul Bozoki, Chief Financial Officer
Thank you, Johan, and good morning everyone. I'll begin with an overview of assets under management. Average AUM for the quarter was approximately 471.5 million and quarter-end AUM was approximately 397.2 million. Lower digital asset prices continued to weigh on reported assets under management during the quarter, consistent with conditions across the broader digital asset market. Our effective management fee yield was approximately 1% compared to approximately 1% in the prior period, primarily reflecting the larger weighting of Bitcoin-related products within our AUM which carry lower or no management fees, as well as continued weakness across many altcoin markets within Valour. Our effective staking yield of 2.4% also moderated during the quarter as lower digital asset prices, compression in lending rates for Bitcoin, Ethereum, and changes in the composition of staking assets reduced overall monetization. Client activity remained encouraging despite these market-driven headwinds. Valour generated 22.8 million of net inflows during the quarter, reflecting continued demand for our products despite the broader market environment.
These inflows provide a solid foundation for future growth in assets under management as digital asset prices recover. Total revenues for the quarter were 7.8 million compared to 11.2 million in the prior period, reflecting lower average assets under management and unfavorable mark-to-market adjustments on our digital asset holdings which are recognized through revenue under our broker-dealer accounting structure. Excuse me. The company also maintained a fortress balance sheet, ending the quarter with 60.3 million in cash and cash equivalents, 19.1 million of Stretch preferred shares and RWUSD financial assets, 10.4 million of USDT and USDC tokens, and 30 million of digital asset treasury holdings for total liquidity of 119.8 million. For clarity for our investors about the obvious drop in our cash balance from Q1, we bought $20 million of MicroStrategy Stretch preferred shares, or 200,914 shares, to achieve a higher yield on our treasury cash reserves. These preferred shares yield 12%, or $1 per month. We also purchased a smaller position in RWUSD product. Our short-term U.S. Treasury bill holdings yield approximately 3.5%, so these other products yield significantly more.
These investments are disclosed on the face of our balance sheet as other investments at fair value through profit and loss and, again, management. We view these as essentially cash equivalents, but they're not classified as such under IFRS rules. We believe this strong financial position provides flexibility to continue investing in strategic initiatives while maintaining a disciplined approach to capital allocation. Turning to product activity, we ended the quarter with 102 ETPs and structured products across our platform.
We continue to expand our institutional product pipeline and distribution capabilities while advancing several new investment products and fund structures. Stillman Digital maintained an important diversification component of the broader platform. During the first half of 2026, Stillman generated approximately $5.4 million of revenue, representing 30.2% year-over-year growth. We remain encouraged by the business's trajectory and its contribution to the overall platform as it paces for a record revenue.
We remind our investors that Stillman revenue growth is not dependent on cryptocurrency prices increasing, but rather on trading volumes and realized trading spreads. Turning to operating expenses, general admin expenses and fees and commissions, which are our main cash costs, totaled 8 million in the quarter, which represents a 1.6 million reduction from the 9.6 million incurred in Q1 2026. Of these costs, we remain focused on disciplined cost management and continue working towards our targeted annualized cash operating cost structure of 36 to 39 million while continuing to invest in our business.
Our bottom line result was negatively affected by 16.3 million negative mark-to-market adjustments on our venture portfolio as well as our Stretch preferred shares. Most of the negative adjustment is from the markdown of our 5% investment in AMINA Bank to reflect lower AUM and a compression in EV-to-AUM multiples across a valuation peer group. We are aware of publicly available information that AMINA Bank has engaged Cantor Fitzgerald to explore a potential public listing for it.
With that, I'll turn— I'll turn
Andrew Forson, President
Thank you, Paul. As we discussed last quarter, our focus remains on expanding the institutional capabilities, distribution relationships, and operating infrastructure needed to support the next phase of growth for DeFi Technologies. Throughout the quarter we made progress across several strategic initiatives designed to broaden our product offering, improve monetization, and expand access to the platform. A key priority remains the development of regulated fund structures and institutional investment products.
We are working to bring these initiatives to market in a disciplined manner with an emphasis on products that are fully operational, commercially ready, and available to investors. An organization like DeFi operates in a complex regulated space which requires the building of trust through relationships. Initiatives often require work months and years before the results are seen by the general public. In our case, Q2 saw increased adoption by partner organizations globally of our DVO Index platform, which provides a strong, broad narrative to discuss the unique strengths of each product within the Valour platform.
Q2 also saw us systematize and execute on approaches for interacting with institutions and onboarding institutional capital into our Valour products. Over 40% of this quarter's inflows are directly attributed to our institutional events and outreach. To give a clear example, deals that began as discussions at our Abu Dhabi event in December 2025 closed during Q2. We have built an institution-focused marketing and outreach strategy that uniquely and interestingly enables us to communicate the power of our products and the services offered by our portfolio companies and our pipeline of future products on our terms, efficiently and economically, to a global audience of bona fide investors. We built this capacity which has enabled us to be competitive and generate positive net inflows despite compressed digital asset prices and poor market conditions in less than 12 months. What we've created plays an important role. We finally have an all-important institutional sales platform. The beauty of what we do and how we do it is it is global and flexible enough to accommodate all the innovative products in our pipeline that have been discussed by Johan in a CEO letter and his earlier statement in science and in finance.
To be effective, we must categorize the factors we deal with as independent or dependent variables. I remain heartened by our team's focus and our company's resilience in unfavorable market conditions. I am bullish on DeFi Technologies, Valour, and Stillman Digital because we are demonstrating increased efficiency and effectiveness with the dependent variables. These elements we have control over, like net inflows, visibility, product development, clarity of the financial story, optimization of our corporate venture holdings.
Those areas we do not have full autonomy or control over, like asset prices and regulatory approvals, which can be impacted by anything from war, interest rates, holiday seasons, and broader asset prices, we monitor closely and have a dedicated team that responds quickly and professionally to all requests. And in an attempt to ensure we give ourselves the best shot at success, I ask listeners and viewers to note when Johan speaks of creating a platform, these are not empty words.
He's done it before and the evidence of this is in our world-leading portfolio of over 100 digital asset underlying ETPs. Now we are entering into a new era of product with the objective of expanding our platform into structured instruments that have the potential for performance-based upside increases. It is not a question of if these products will be delivered; they will be, and when they come online, the nature of many of these products are higher returning with great potential for upside to the firm.
These initiatives are important not only because they broaden our product offering, but also because they expand the ways we can monetize the platform. Historically, our revenue model has been driven primarily by assets under management, management fees, and staking income. Over time we believe these new institutional products and investment strategies can add performance-based returns, institutional mandates, and other revenue streams that are less directly tied to the direction of digital asset markets.
Since November 2025 we've worked hard to develop our innovative business intelligence system that provides granular views of key competitive and operational metrics. This has grown into a system of proprietary data-driven tools that give unique insights as to how specific Valour single or index products interact with the financial world around us. Such research and development efforts leverage our infrastructure to provide unique insights. This serves as a proving ground for potential new products that can be created for third-party asset managers for deployment by their internal risk desks or wealth management platforms.
This new capability enables us to expand distribution through the provision of valuable insights, enables us to create new institutional partnerships, and improve monetization across products and assets already supported by the business, whilst using data to define the products of the future. The positive net inflows generated in Q2 are proof that our model is working, demonstrating the strength of our product offering and our ability to attract institutional and other customer assets through challenging market conditions.
We also continue to invest in the long-term capabilities of the platform. As tokenization becomes more widely adopted across financial markets, we believe our technology and operating infrastructure can eventually support a broader range of financial products and asset classes, including tokenized real-world assets. As the new products come online, I'm excited that the firm will be in a position to speak with institutional capital allocators worldwide.
This is the platform and product diversification that will insulate the company from the exogenous shocks inherent in digital asset markets whilst providing new and larger opportunities for institution-focused revenue generation. That said, our focus is on execution. We will only communicate new products when they are operational and available to investors, rather than before the necessary legal, regulatory, and commercial requirements are in place.
We believe this approach will strengthen credibility, support durable client relationships, and create more sustainable value for shareholders. With that, I'll turn the call back over to Curtis for Q&A.
Curtis Laughman, VP of Marketing and Communications
Thanks, Andrew. First of all, if you're an analyst, please do raise your hand so I can invite you on live to chat, and then I'll go through the Q&A chat here for our retail investors. We'll start with a couple questions there, I guess. First question from Ann Schumann: When can we expect the smart crypto fund and hedge fund products? How is UCITS listing coming? So I think, Johan, if you could sort of give as much color as you can on our upcoming fund structures as a whole.
Johan Wattstrom, Chief Executive Officer
Yeah, for sure. We have actually right now much more visibility than we had only a few weeks ago. Unfortunately it took also, I think, three months to onboard with some key trading partners because of different, yeah, different jurisdictional problems and other things. But now we finally onboarded with everyone. There's no more obstacles for the smart crypto fund. So we are in the final, yes, practicalities. So should be maybe a week or two, hopefully until three weeks the most.
But I would say within—it's possible within a week. We have no more actual formal obstacles. Everything is done. We are into practicalities and just some final integrations. So we should see that within Q3 for sure. And on UCITS, unfortunately we got a note from the Swedish FSA. They dragged it out longer time than they actually had a legal ground to do, and they actually in the end didn't even give a reason. They're quite anti-crypto activists in the Swedish FSA since a long time.
But we have actually both appealed that decision. We have also redone the application in Sweden, just to put pressure on there. But we also have come quite far in the Luxembourg structure, where they are quite neutral in terms of different asset classes. So yeah, if we don't get through in Sweden, we will get through in Luxembourg, but if it's Luxembourg it might unfortunately take another few more months. So we can't give an exact date or clarity.
I don't want to promise anything there, but within this year is my hope. If we get through in Sweden, I have no idea what the probability would be—that could go much quicker. But so unfortunately uncertainty on the UCITS, but on the hedge fund we have clarity. We are through with all the obstacles.
Curtis Laughman, VP of Marketing and Communications
Next question. Our shares are one-fifth the price that they were when we initiated the capital raise. Should we not utilize some capital at this 80% discount to close out our current buyback? So again, another question and thoughts around on our view on buybacks.
Johan Wattstrom, Chief Executive Officer
Yeah, I can say what we said before on that matter, that our objective is to use the cash to grow our operation. We have done some investments this quarter. You have to get a high yield on the cash, but obviously we want to maintain it ready for some of the deals we continuously are looking at, which we think would have a much higher impact on the stock price if and when we can get those, or any of those, done than to just buy shares back. I also have the opinion that we should primarily buy back shares, if we do, if we have a strong positive cash flow and use parts of actual earnings to buy back shares.
Obviously you can do it by other reasons as well, but it's in a falling market, in a market where we don't see any change in the crypto market so far, I don't think it will have a lasting impact. I think what would have a lasting impact is for us to grow the AUM, get out with more products, and do structural deals. So that remains the focus. That's not a no to buybacks, it's just saying that we think we have better opportunities, better use of cash at this point.
Curtis Laughman, VP of Marketing and Communications
And to reemphasize again, when we do buy back shares, those shares are retired. It's not like buying shares on the open market and you hold them and they increase in value if the share price appreciates. So once we utilize that capital, the shares are burned. That capital is then dead. It's gone. We can't make it liquid again and go out and buy anything else or reinvest it anywhere else. So from an operating leverage standpoint, especially during a bear market when we're not producing a whole lot of free cash flow, it doesn't make a whole lot of sense for the long-term revenue capabilities of the company.
Johan Wattstrom, Chief Executive Officer
Yeah, I think what is best for the stock price long term, what will drive the stock price in long term the most, is obviously for us to grow the AUM, grow the revenues, and that remains our full focus with all the resources we have at hand.
Andrew Forson, President
And then a couple of questions on the NASDAQ compliance and applying for the 180-day extension. I'll address this quickly. We will be applying for the additional 180-day extension on September 1st. We have had discussions with the team at NASDAQ. They have indicated that we do qualify for the additional 180-day extension, but they cannot give us an affirmative answer, yes or no, until the application is submitted. But we are very optimistic that the extension will be granted.
And then, you know, of course during that time, hopefully crypto winter ends and the company rewrites during that time. So we'll keep all investors apprised as we proceed along this process. And the goal here is to get back over a dollar organically through our own internal growth initiatives and, quite bluntly, the market coming out of a crypto winter and back into a stable run in Bitcoin and some of the other alts. I'll answer one more question, we'll go to analysts, and then I'll keep answering.
We'll pop back and forth. Now that geographic expansion has slowed and institutional products have stalled in Europe, what does the company see as the biggest driver of AUM outside of increased crypto prices? Again?
Johan Wattstrom, Chief Executive Officer
Yeah, I can start. So I think obviously the new products we're launching now, the new crypto fund, the UCITS funds and so forth, where we address a different market, we have distribution not just locally in our core markets, we have distribution globally for those products. I think in that market we have a lot of demand; there's not a lot of products to choose from. I think our products will be unique and address that market in a very, you know, extremely attractive way.
We also will be listing a few innovative new products the next few months, I think two of them, hopefully within two weeks, that are unique. There's no competition for those. So I think within the product portfolio, I don't want to get too explicit about what we're going to list here the next few months. That's something we will announce when we list. But both the institutional fund-type products and also the other ETP products we have in our pipeline I think will be unique, will address a new market than what we are working with right now.
So I think a lot of untapped potential there, and I think that will really drive AUM once launched.
Andrew Forson, President
Thanks. And then, Paul, before we go to Ed and Alan and Hal, I guess could you clarify the use of capital to purchase the stretch prefs and our USD?
Paul Bozoki, Chief Financial Officer
Yeah. Okay. So for everybody, you know, we keep our cash in US dollars. We keep our cash in US Treasury bills, short term, three months or less, and the yields on those are about 3.5%. So it's not great, as we all know in this environment. The board approved 20 million of our cash pile going to MicroStrategy prefs, the stretch STRCs that I think most people are aware of. We did buy them at 99.50. They went as low as $85 at June 30th. I think they were actually in the 70s, but they were 85 on June 30th.
So we marked it down in the financials that you're seeing today. Those shares have since recovered to approximately $95, and Michael Saylor and Phong Lee have come out publicly repeatedly saying that their goal is to get them back to 100. We will not sell. We don't have any intention to sell our shares in the near term. They're just a higher-yielding component of our treasury. So we do pick up a dollar a share. There's no withholding tax. They're paid as return of capital.
We do still consider them attractive.
Andrew Forson, President
Okay, Ed from Compass Point, go ahead and unmute yourself. You have the floor.
Ed, Analyst at Compass Point
Hey guys, thanks for taking my question here. Do you mind, I mean, I know you kind of touched on some of the strength and the net flows being driven by institutional. But just kind of curious, was it any specific product, or was it just kind of across the spectrum for those 2Q inflows? And I know I think you guys called out one big sale related to Hedera, I think early in the quarter. But it seems like even since then things have had a pretty good pace.
Paul Bozoki, Chief Financial Officer
Yeah, I can touch that briefly. There certainly was the 11 million of HBAR, the Hedera, which was a big part of it. And just overall, for people to be aware, of our AUM we're 46% Bitcoin/Ethereum and 69.8% Bitcoin/Ethereum/Solana, so 70% in three tokens. So the growth does generally reflect that. There was the disproportionate HBAR inflow that we press released and you're aware of.
Ed, Analyst at Compass Point
Yeah, I guess even, I mean for the $13 million of inflows, it's still your best quarter in a while. I'm just kind of curious, like what's driving that? Is it any geography? Is anything specific, or was that like, was it lumpy or was it generally broad based?
Andrew Forson, President
I mean, I can comment to that. It was actually quite broad. I think the distribution that Paul mentioned is correct, but we've just really been, you know, over the past year we've just been really hammering contacts with broker-dealer platforms, with institutional investors, and making sure that people are aware of our presence. They see that we're visible. There have been some strong marketing and publicity campaigns in the Nordics as well. And we have a very granular system for being able to track which products money is flowing into and out of, not only us but our competitors too.
So we're just maximizing efficiency, and we were aware that it was a tough market, so we wanted to make sure to squeeze out every last drop of capital into our products—to attract capital into our products.
Curtis Laughman, VP of Marketing and Communications
Yeah, a bit more color on that too. It's like behind the scenes, Andrew, Jacob, Johan, and our marketing and sales team at Valour are doing an extensive amount of work to grow the brand not only in the Nordics but across the EU. And I know a lot of folks have their own opinions on our symposiums or capital market series, but again these are where you'll see the seeds planted that will turn into net inflows and AUM gains. So there are a lot of tiny little things and face-to-face connections that our marketing and sales are doing, and these are things that we weren't able to do because, frankly, we weren't in the position to do it from a financial perspective a couple of years ago. But even in a crypto winter, with an extensive or robust balance sheet, we're able to be aggressive but also efficient in our marketing and sales tactics this time around. And we have run a couple of our larger campaigns in the Nordics to attract additional inflows into our ETPs over the past few months as well. So even though things are a bit slower in the ecosystem itself, this is an opportunity for us to be aggressive and grow our brand, continue to plant seeds, and see those fruits of our labor when conditions turn.
Ed, Analyst at Compass Point
Great. And I think in the press release you kind of mentioned how in the bear market you guys are pretty well capitalized and there could be potential M&A. Obviously nothing specific, but I'm just kind of curious of what you're seeing. Are you seeing lots of potential deals and sellers here, or is that just kind of a general comment that you might be able to execute on at some point?
Johan Wattstrom, Chief Executive Officer
Yeah, I can do a brief comment. We see a continuous stream and pipeline of potential deals of different kinds in the M&A space. The last six months, I'd say, have been much more intense in that regard. We're obviously extremely picky. So even though we've done some really deep due diligence of some deals which were very, very close and could have been extremely good, if it's not the perfect fit, we don't go ahead. So we've done a lot of work on that.
We see more and more in the pipeline. So it's very active. Yeah, the M&A space is very active right now and a lot of interesting deals coming up, and we are selectively approaching and looking at new deals, but we obviously want to make sure it's a perfect fit for our long-term strategy, for sure. So, yeah, it's super exciting and a lot of interesting discussions are being held.
Ed, Analyst at Compass Point
Yeah, great. Thanks for the color.
Andrew Forson, President
Any other questions, Ed?
Ed, Analyst at Compass Point
No, that's it for me.
Andrew Forson, President
Alan Lee from Maxim. Alan, you have the floor. All right, I'll invite Hal from B. Riley. Oh, I'll go ahead.
Hal, Analyst at B. Riley
Yeah. My question is on the operating expense that you mentioned in the presentation—now that operating expenses fell to about 10 million from 14. Is that a kind of a reasonable level going forward? And, you know, with the AUM at quarter-end at just below $400 million, can you maybe give us some commentary on kind of break-even levels now with maybe the lower expense structure?
Paul Bozoki, Chief Financial Officer
Thanks for the question, Hal. It is our goal to keep operating cash operating costs, which is the general admin and the fees and commissions—right, so excluding the non-cash share-based stuff—in the $36 to $39 million range. We need about $550 million of AUM at 4.25% monetization to be break-even at that level, which we think is a reasonable monetization rate in slightly stronger crypto markets. So that's something we, of course, continue to monitor and, you know, depending how long the crypto bear market goes down, we'll continue to reevaluate.
But at the current time, we think that's where we'd like to operate.
Hal, Analyst at B. Riley
All right, thanks Paul. Oh, if I get—that's a follow-up to Andrew. Andrew, you mentioned on the inflows, was it 40% of new inflows were from institutions? Just want to make sure I heard that number right.
Andrew Forson, President
Yeah, it was approximately 40%. Well, actually, no—it would probably be higher than that, but it was 40% from institutional deals. So what happens is we have face-to-face meetings at our events. If they like it, we enter into discussion about how we can use the platform and how institutions can invest in our products, and those particular deals—I'm actually looking at some of the questions from some people—but those particular deals that were reached at these meetings and events that we have represented approximately 40% of the Q2 inflows.
So, I mean, one could say that without these new vectors of communicating and institutional outreach and events, we may not have been able to close those deals or others like it in the future. And that's using our existing product mix. Whenever you factor in the fact that we are creating new products that are going to be less geographically restricted and have more of an appetite globally, and will also be very interesting to institutional investors, then that's where what we're doing hopefully will scale more and drive more AUM to our platform, as Paul and Johan have alluded to.
Hal, Analyst at B. Riley
You know, one follow-up to that is: what is an idea for a geographically less restricted product that might replace what you've been doing? What does that really mean, or how is that constructed?
Andrew Forson, President
Well, for instance, some of the fund products that Johan has discussed—we've had interest and we have discussed with wealth management platforms, institutional allocators outside of Europe, and they can participate in those quite easily because they have an interesting theory behind them, they have an interesting investment philosophy, great Sharpe ratio, interesting Sortino ratios. So these are products that larger capital allocators outside of Europe would have an interest in and would be able to avail themselves of.
Hal, Analyst at B. Riley
Thank you guys.
Andrew Forson, President
Yeah, I think unless Alan comes back, I think that's all the questions we have from analysts. Alan, are you still there? Invited you back. Alan, if you can unmute yourself. Okay, there we go.
Alan Lee, Analyst at Maxim
Hi, can you hear me? Sorry about that. Yeah, I just wanted to check—getting back to cash operating expenses—you said you're shooting for, your target is $36 to $39 million? I thought you were very disciplined this quarter. Your G&A plus the fees and commissions was just under 8 million, which if you annualize that, that would get you to 32 million, which is lower than what you said, 36 to 39. Is it reasonable that you could be running at a lower rate than 36 to 39?
Paul Bozoki, Chief Financial Officer
Yeah, I mean, you got to look at what we were a little higher in Q1, Alan, so hopefully we do come in at the lower end of the bar. We're trying to under-promise and over-deliver here, but yeah, we are running leaner now.
Alan Lee, Analyst at Maxim
Okay, good. And then, there were some issues on yield this quarter, but the normal assumption for coming up with the break-even AUM is using a 4.5% yield on AUM. Is there any reason that we should be using a lower yield going forward?
Paul Bozoki, Chief Financial Officer
So we did 5% actual in 2025. We were 3.6 in Q1, 3.3. I mean, Bitcoin was also 58,300 on June 30th. Right. Like, it's... We do personally think it's dark days right now in crypto and we are hopeful that the fall with the four-year cycle and, you know, if Bitcoin can get closer to its 200-day, let alone go through it, it'll be better and then the yields will come up. So the yields right now are extremely distressed. We are still internally budgeting at 4.25.
If you feel you want to use lower, it pushes the break-even up. But you can see we are aggressive on the costs and trending on the low end as well.
Alan Lee, Analyst at Maxim
Okay, did you say you're budgeting 4.25 or 4.5?
Paul Bozoki, Chief Financial Officer
4.25 for hopefully for the fall. Yeah, yeah.
Johan Wattstrom, Chief Executive Officer
The dynamic here is obviously that when markets go down, the Bitcoin dominance normally goes up. And so our higher-yielding assets are a lower part of the AUM, and that's what drives down the average monetization rate. So even though we've been more efficient in getting higher monetization rates in assets across the board, the product mix changes when the market goes down. Bitcoin dominance goes up; when we mostly have Bitcoin and Ethereum, that's the dynamic that actually lowers the average monetization rate.
So even though we do a great job in actually earning more per most assets than before, because a larger percentage of the AUM now is Bitcoin and Ethereum, where returns are lower, that's what's driving the monetization rate, average monetization rate, down in a bear market. But that obviously reverses when the market goes up. And then what we've seen in all cycles before is that then the alts and other coins come back with a high beta and they... yeah... And then the larger part of the portfolio they are, the more the monetization rate goes up.
Alan Lee, Analyst at Maxim
This is very helpful. Thank you very much. Cool.
Curtis Laughman, VP of Marketing and Communications
Thanks, Alan. With that, we'll go ahead and wrap it up. If we were not able to get to your questions, please do email IR at DeFi Technologies. Thank you all for your time, your patience, and your commitment as shareholders. We do value that greatly, and we'll see you next time. Thanks, everyone.
OPERATOR
Thank you.
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