Digital asset loan provider Genesis Capital has issued over $1.5 billion in loans since launching its crypto lending platform in March of 2018, adding $425 million in the first quarter of 2019.
An affiliate of Genesis Trading, one of the largest over-the-counter cryptocurrency brokerages, the New York-based lending platform offers institutions and market-makers the ability to borrow Bitcoin and other digital currencies in large sizes over fixed terms with a minimum loan size of $100,000. Total loans in the first quarter of 2019 increased by 17%.
The loan book is denominated in a mix of cryptocurrencies, including Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin and Ethereum Classic, with Bitcoin capturing 63.5% of loans originated.
Borrowing of the number one cryptocurrency has been consistent among high-frequency trading firms in need of capital with data showing that most of the Bitcoin loans were made to hedge investments, implement market strategies or invest in businesses, as opposed to price speculation.
Digital Asset Lending Composition
- Bitcoin – 68.1%
- Ethereum – 3.6%
- XRP – 6.7%
- Litecoin – 3.6%
- Bitcoin Cash – 0.3%
- Ethereum Classic – 2.3%
- USD – 9.6%
- Other – 5.9%
Source: Genesis Capital Q1 Insights
In Q4 2018, Genesis began offering US dollar loans, the most active sector in the company’s portfolio, after Bitcoin.
“Because we have been operating in this industry for several years and understand the liquidity and volatility characteristics of digital assets, we are happy to accept digital assets as collateral for cash financing.
We believe this experience adds value to institutions looking for liquidity without having to sell and realize capital gains, miners looking to pay electricity bills without selling inventory, and hedge funds seeking to leverage long positions.”