Routemaster Capital (TSXV:RM)
As Decentralized Finance Becomes The New Normal, Routemaster Capital (TSXV:RM) Is Positioned To Make An Imprint
There is a revolution occurring in the global financial system. FinTech and blockchain technology is beginning to change the way we bank, the way we lend, and the way we invest. Everyone ranging from big banks, to bullish cryptocurrency investors, to one of the 1.7 billion people in the world without access to a bank, is adjusting to this revolution.(1)
Canadian investment firm, Routemaster Capital (TSXV:RM), has been well aware of these changes, and has positioned itself ahead of the pack for the eventual mainstream shift to decentralized finance. With strategic investments in industry leaders and pioneers, Routemaster is well ahead of the curve when it comes to foreseeing the evolution in finance. Whether you like it or not, decentralized finance, or DeFi, is the wave of the future. However, there is one company in Canada that is beating others in realizing this.
What Is Decentralized Finance (DeFi)?
DeFi is an ecosystem of financial applications that are based on blockchain technology. The goal of DeFi is to make financial transactions more secure, more accessible, and more open and internationally universal. In other words, DeFi is a global, more accessible, open alternative to everyday mainstream financial services- savings, loans, trading, insurance and more.
DeFi makes finance accessible to anyone in the world with a smartphone and internet connection. This is an entirely new financial system consisting of applications built on decentralized technology, rather than being controlled or regulated through one centralized entity. This is something that has evolved into a much larger financial system out of a simple blockchain network. Simply put, this is an ecosystem that may potentially create a whole new subcategory of finance.(2)
Outside of allowing ambitious people to create Cryptos pegged to the US dollar, DeFi apps nowadays can perform financial actions such as creating monetary banking services, negotiating automated P2P loans directly between two strangers in different parts of the world without an intermediary, lending out money and earning interest, taking out a loan, exchanging one asset for another, going long or short assets, and implementing automated advanced investment strategies.
Main Characteristics of DeFi
These are the five main unique characteristics to be mindful of when examining DeFi:
What “non-custodial” really means is that they- the financial intermediary- does not have custody of your assets- you do. In other words, DeFi’s ecosystem allows transfers of value between people without the need of intermediaries such as a bank or financial institution. You as the individual are the only one in control of your e-wallet and funds.
These decentralized networks are global, and without borders. This is a “parallel” financial system, with unlimited access.
The code behind DeFi applications is open and transparent for anyone to see and inspect. If you were wary of cryptocurrencies, and “new-age” decentralized finance, fear not. Because the code is so transparent, anyone can verify how a DeFi app and protocol works, and can track exactly where their money is.
The entire DeFi ecosystem consists of many blockchain based apps and protocols, and is built on open-source code. This enables developers to build on top of others’ applications, which accelerates innovation. In other words, these DeFi applications act as lego pieces which leverage each others’ value. If one user doesn’t like how one application is being built, they can simply copy the code and build a new and improved app.
DeFi protocols are built on public blockchains such as Ethereum. Ethereum, and other public blockchains, are run by thousands of computers across the globe. In other words, there is not one central entity in control of the financial system- it’s thousands. This is the entire purpose of DeFi. Platforms are built to be managed by a community of users, and not centrally controlled. Users can become owners of their own financial destiny without a centralized party unilaterally taking control of funds.
DeFi’s Growth In 2020 Has Been Astronomical
At the beginning of 2020, the total value locked into the DeFi market reached approximately $680 million. As of today, the DeFi market is worth $6.68 billion, with many saying it could be nearing $16B.(3)
Although DeFi has not taken over the global financial system yet, 2020 may have been a turning point in the growth of DeFi. In early 2019, there was only $275M of crypto collateral locked into the DeFi ecosystem.(4) By February 2020, that number grew to $1B. Once July hit, however, the growth of DeFi really exploded. February’s $1B more than doubled to $2.5B in early July.(5) By mid July, DeFi’s value increased to $3B, and by July 25, hit $4B.(6)
October also witnessed astronomical growth, despite many DeFi tokens suffering heavy losses. The DeFi sector’s user count increased in October by nearly 40%, from roughly 555,000 to 775,000.(7) Additionally, another 85,000 users joined the DeFi ecosystem during the first 11 days of November, increasing the number of users by 11% in less than two weeks.(8) In total, that means DeFi user numbers have grown 55% from the start of October.(9)
DeFi Lending and DeFi Exchanges May Have the Most Potential to Reshape Finance
Out of all of the financial services that DeFi is involved in, there are two areas showing the most potential: DeFi lending and DeFi exchanges.
DeFi lending has significant potential to disrupt, and eventually overtake worldwide P2P lending.
DeFi lending has quickly become increasingly popular since it lets users both borrow and lend in a relatively safe and easy way- without third parties and intermediaries. In 2018, this market was valued at $34.16B. It is now projected to reach $589.05B by 2025- an astronomical CAGR of 50.2%.(10)
Many experts also believe that decentralized trading could eventually become the face of cryptocurrency exchanges. Compared to centralized exchanges, decentralized exchanges offer more control of your own funds, transparency, smaller risk of price manipulation and falsification of trade volumes, less exit scams, and counterparty risks.(11)
While overall trading volumes on decentralized exchanges remain considerably smaller than centralized exchanges, current market players have been evolving and significantly improving their functionality over the last 2 years.
Routemaster Capital (TSXV:RM) – Positioned To Become A DeFi Force With Strategic Investments
Formerly known as Rodinia Lithium Inc., Routemaster Capital (TSXV:RM) is a Canadian investment firm that operates as a tier 2 investment issuer in Canada. Routemaster engages in the acquisition of equity, debt, or other securities of publicly traded companies, private companies, or other entities.
However, with Routemaster’s recent strategic moves, it has positioned itself to benefit from the innovative revolution occurring in the global financial system.
With its most recent investment, an acquisition of 49% equity interest in DeFi Holdings Inc., Routemaster is set to benefit greatly from DeFi’s evolution, and could potentially witness robust long-term growth. This is quite a statement from Routemaster. It is essentially announcing to the world that DeFi is the future, and that they intend to be at its forefront.
Routemaster’s investment in DeFi Holdings, is not only a bet on a company that is focused on investing, incubating and managing trading technologies associated with the decentralized finance market. It is an investment into the future of finance.
Routemaster is also offering shareholders exposure to the emerging decentralized finance industry with this acquisition.
According to Routemaster CEO Daniyal Baizak, Routemaster is
Olivier Roussy Newton, founder of DeFi Holdings Inc., also had this to say:
Investors See What Routemaster is Doing…And The Stock Has Surged
Routemaster’s stock has surged upon news of its ventures into the decentralized finance space. Year to date, the stock is up a whopping 258.29%.(16)
But this truly does not depict how much this stock can surge on exciting news. In the week that Routemaster announced its investment into DeFi Holdings, October 5-9, Routemaster’s stock surged by almost the same amount as its surged in 2020: 232.39%. Routemaster’s performance in 2020 has alone been something to marvel at. But this 1-week performance is nothing short of astounding.(17)
Despite Its Surge, Routemaster May Be At An Attractive Entry Point
Despite its surge in 2020, Routemaster has pulled back from its highs and may be at an attractive entry point. It is trading significantly below its 150-day moving average, and is 41.2% off its 52-week highs.
Additionally, Routemaster has a miniscule trailing P/E ratio of 2.2x- a value that is shockingly small for a company investing in the technological evolution of finance. The fact that a company is this undervalued, yet at the forefront of financial innovation is astounding.
Taking these metrics into consideration, combined with Routemaster’s robust investments into the future of finance, makes this a very enticing entry point. With its small float, and tiny market cap of 4.227 million, Routemaster surges on any positive announcement or semblance of good news. As decentralized finance is projected to become more and more widespread and widely used as the world continues to evolve, it is only a matter of time before Routemaster is no longer a bargain at these levels.
Routemaster’s Financials Also Indicate Efficiency and Future Growth
Routemaster’s financials also indicate a company poised to grow along with DeFi. While it is always important to do extra due diligence on micro-cap investment companies, Routemaster’s ROA of 109.9% and Gross Profit Margin 100%, indicate a healthy company that is able to generate an efficient profit from its total assets and total revenue. Its current ratio of 2.5x also indicates that the company is more than capable of paying off its short term obligations.
Its Technicals Are Also Very Attractive
According to BarChart’s technical indicators, this is not just any penny stock that is simply a speculative gamble. This is a company positioning itself in a growth industry trading at a grossly undervalued price with some actual strong technicals to back it up.
The company first and foremost has a 96% BUY rating according to BarCharts. Additionally, its short-term, medium-term, and strong-term technical indicators are all in the bullish category. Its indicators with the most maximum strength and direction are the medium-term 50 – 100 Day MACD Oscillator, 50 – 150 Day MACD Oscillator, and 0 – 200 Day MACD Oscillator. Its long-term 100 – 200 Day MACD Oscillator also indicates strength with strengthening direction.
To Sum It Up….
At such an astoundingly cheap price, with Routemaster Capital’s (TSXV:RM) strategic investments in the DeFi and digital finance space, it is not only positioning itself at the forefront of the financial revolution- it is bringing investors along for the ride. This is not just some company talking about entering blockchain and decentralized finance. This is a company investing in DeFi players focused on strength and quality. As DeFi continues to surge worldwide, with surprisingly strong financials, strong technical indicators, and strong positioning, Routemaster’s outlook is very bright.
For these reasons, I see…
Source 1: https://academy.ivanontech.com/blog/decentralized-finance-in-2020-defi-trends-to-keep-an-eye-on
Source 2: https://101blockchains.com/decentralized-finance-defi/
Source 3: https://academy.ivanontech.com/blog/decentralized-finance-in-2020-defi-trends-to-keep-an-eye-on
Source 4: https://www.cityam.com/what-is-decentralized-finance-defi/#:~:text=Decentralized%20finance%2C%20also%20known%20as,sector%20of%20the%20cryptocurrency%20industry.&text=Although%20still%20small%20when%20compared,locked%20in%20the%20DeFi%20economy
Source 5: https://www.cityam.com/what-is-decentralized-finance-defi/#:~:text=Decentralized%20finance%2C%20also%20known%20as,sector%20of%20the%20cryptocurrency%20industry.&text=Although%20still%20small%20when%20compared,locked%20in%20the%20DeFi%20economy
Source 6: https://www.cityam.com/what-is-decentralized-finance-defi/#:~:text=Decentralized%20finance%2C%20also%20known%20as,sector%20of%20the%20cryptocurrency%20industry.&text=Although%20still%20small%20when%20compared,locked%20in%20the%20DeFi%20economy
Source 7: https://cointelegraph.com/news/defi-the-odds-total-user-numbers-up-55-in-just-six-weeks
Source 8: https://cointelegraph.com/news/defi-the-odds-total-user-numbers-up-55-in-just-six-weeks
Source 9: https://cointelegraph.com/news/defi-the-odds-total-user-numbers-up-55-in-just-six-weeks
Source: 10: https://simetri.cryptobriefing.com/defi-market-report
Source 11: https://academy.ivanontech.com/blog/decentralized-finance-in-2020-defi-trends-to-keep-an-eye-on
Source 12: https://finance.yahoo.com/news/routemaster-capital-signs-loi-acquire-120000287.html
Source 13: https://finance.yahoo.com/news/routemaster-capital-signs-loi-acquire-120000287.html
Source 14: https://finance.yahoo.com/news/routemaster-capital-signs-loi-acquire-120000287.html
Source 15: https://finance.yahoo.com/news/routemaster-capital-signs-loi-acquire-120000287.html
Source 16: https://yhoo.it/2Iyzuyh
Source 17: https://yhoo.it/2Iyzuyh
Source 18: https://finbox.com/OTCPK:RDNA.F
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