Genesis Lends $425 Million of Crypto in Q1

Genesis Global Trading's cryptocurrency lending arm continues to grow - and diversify beyond short sellers.

Announced Thursday, Genesis Global Capital wrote $425 million of crypto loans in the first quarter, bringing its total originations since the business launched in March 2018 to $1.53 billion.

Genesis' portfolio of outstanding loans grew 17 percent from the end of last year to $181 million as of March 30.

Perhaps most notably, short sellers now account for only 3 to 5 percent of Genesis' bitcoin loans, down from about half in early 2018, Michael Moro, the CEO of Genesis' trading and lending businesses, told CoinDesk.

The predominant category of borrowers for Genesis now is exchanges and over-the-counter trading desks, which prefer to keep clients' funds in cold, or offline, storage and settle trades with borrowed coins, he said.

In the report, Genesis shows a clear correlation between the price movements and borrowing activity of the company's clients.

In early February, there was an uptick in ether shorting when the coin was trading at $100; "Loans outstanding ballooned to the highest level over the quarter," the report says.

Genesis borrows crypto from "Whale" investors, including some individual early bitcoiners, Moro said.

The firm borrows at a 4 to 5 percent interest rate and lends at 6.5 to 7.5 percent; the interest is paid in crypto.

Moro believes the popularity of crypto loans and crypto-collateralized cash loans is due to the fact that investors want to hold their bitcoin, and to the general maturing of the market.