Genesis Capital doubled its originations in last three months of 2018
One of the leading names in the institutional cryptocurrency loans, Genesis Capital announced on Wednesday that it has originated over $1 billion in loans in the last 10 months, according to a report by CoinDesk. The firm, formerly known as SecondMarket, launched as a crypto trading firm in 2015.
As per the latest “Digital Asset Lending Snapshot” published by Genesis Capital on Wednesday, the firm announced that loan originations have doubled in the last three months of 2018, as compared to the previous six months.
The firm said in its Digital Asset Lending Snapshot:
“November and December were the most active months to date as we saw new hedge funds and trading firms utilizing “spot” borrow. This growth combined with new business lines has driven our loan book to $153M in active loans outstanding, up $23M from Q3, despite a 44% price decline in Bitcoin (BTC).”
Citing bearish cryptocurrency market as one of the main reasons for the company’s revenue, Genesis Capital CEO Michael Moro said that the demand for loans in both cryptocurrencies and fiat grew dramatically last year, particularly for those shorting cryptocurrencies.
The majority of the company’s loan portfolio was Bitcoin, with nearly 20 percent of the portfolio including XRP and the remainder constituted through other cryptocurrencies.
The most interesting trend, which Moro noted provided a counter to the narrative that short sellers are responsible for falling prices of cryptocurrencies.
The company said:
“The short sellers tend to wait for the price of Ethereum to go down before they get in, they’re not the catalyst. Short sellers probably exacerbate the magnitude of the selloff [but] they joined the crowd, they didn’t start the crowd.”
Speaking to The Block, Moro said that even as the crypto bear market reigns, it has been a lucrative time to run a borrowing business in the market.
Image via Shutterstock
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