Crypto Brokerage Genesis Reports Lower Lending in Q1 as Market Crash Continues

  • Genesis reported $44.3 billion in loans issued in the first three months of 2022
  • Institutional investors are losing interest in bitcoin, report notes

Institutional investor cryptocurrency brokerage Genesis reported $44.3 billion in digital asset-backed loans in the first quarter, down from $50 billion in the previous quarter.

The decline was due to a massive sell-off in all crypto-assets, Genesis wrote in Q1 revenue report Friday. Valuations across the space are almost half of what they were in November, the report added.

Genesis’s lending business focuses on lending to crypto funds and other institutions to hedge investments or short digital assets. The brokerage has issued $195 billion in loans since the lending platform launched in 2018.

Despite recent volatility, new institutions entering the market have shown strong demand for cash lending over the past quarter, Genesis said.

“Institutions continue to develop their crypto strategies and deepen their understanding of this industry, even amid the market uncertainty that marked the start of this year,” CEO Michael Moro said in a statement. “As we continue to deepen engagement with our clients across Genesis’ broad product line, we are committed to further expanding our market share and delivering innovative strategies for clients to access this asset class. in full growth.”

Genesis’ trading desk grew during the first quarter of the year. Notional derivatives volume — including block-traded and exchange-traded futures — reached $27.8 billion in the quarter, up 33% from the fourth quarter of 2021.

Investors are increasingly less interested in single-asset wallets, especially when it comes to bitcoin, Genesis said in the report.

“Since the middle of last year, we have noted a macroeconomic trend in which BTC has gradually become a smaller proportion of our portfolio composition,” the report said. “Many customers also focus on [decentralized finance] funding opportunities in these native layer 1 blockchains, sometimes offering more attractive rates than in typical ETH blockchain protocols.

One possible explanation: There are few opportunities in bitcoin cash and carry transactions, as the three-month basis and the three-month basis were compressed in the first quarter, according to the report. The same trend can be seen in Ethereum-based transactions, which previously traded at a slight premium to bitcoin.

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  • Casey Wagner


    Senior Reporter

    Casey Wagner is a New York-based business journalist who covers regulation, legislation, digital asset investment firms, market structure, central banks and governments, and CBDCs. Prior to joining Blockworks, she reported on markets at Bloomberg News. She graduated from the University of Virginia with a degree in media studies. Contact Casey via email at [email protected]

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