Crypto loans rise 118% to $1.4 billion. Crypto lender Genesis, targeting institutional investors and wealthy individuals, added over $2.2 billion in new originations, an increase of 324% year-on-year.
After the company was launched in March 2018, Genesis has generated approximately $8.4 billion in loans, the majority of which is denominated in bitcoin ( BTC) and cash.
BTC loans rose for the review period, accounting for 51 per cent of the overall loan book and 32 per cent fiat. Cash-based loans have significantly decreased, down from the previous quarter’s 36.6 per cent.
Ethereum (ETH) and bitcoin cash (BCH) are the second and third largest crypto-based loan issuances, accounting for 7.4 percent and 4.8 percent of the portfolio, respectively, according to the lender’s earnings report.
“To think that our loans outstanding would grow by over 100% in just three months going forward is probably unrealistic,” Michael Moro, chief executive officer of Genesis, was quoted as saying.
Additionally, most of the funds provided by Genesis as loans are borrowed from elsewhere such as from wealthy individuals and asset managers at interest rates of between 6% to 12%.
The company then goes on to charge a certain premium when it lends to corporate borrowers such as hedge funds and trading firms, looking for arbitrage, mainly to short crypto. More recently, however a new hype is driving borrowings.
Moro, the CEO, observed “There was an unprecedented desire for digital currency yield generation in the form of spot lending, call option overwriting and liquidity mining on DeFi protocols. This all signals that market participants are seeking varying, rigorous methods to generate yield that correspond with their risk appetites.”
[image: André François McKenzie]