Digital currency prime brokerage Genesis stated its brand-new loan originations increased nearly 700% year-over-year to an all-time high of USD 25bn in this year’s 2nd quarter and were likewise 60% greater than in the very first quarter this year. Also, bitcoin (BTC) is losing its share in their portfolio.
"This marked our thirteenth consecutive quarter of strong lending growth," the company stated, including that this likewise brings the cumulative stemmed worth to USD 66bn given that the launch of the Genesis loaning organization in March 2018.
The Q2 2021 Market Observations Report specified that, regardless of a 41% decrease in the BTC rate over Q2, the business’s overall Active Loans Outstanding reduced by just 8% to USD 8.30 bn.
Per the loan portfolio structure, BTC represented 42% at the end of the 2nd quarter, compared to 54% at the end of 2020.
Q2 2021 loan portfolio structure
"Since our weighted average cost of capital (WACC) on crypto assets was significantly lower than our cost in USD, Genesis had more room to lend crypto at lower rates, even when spreads were much tighter," the company stated.
Other highlights consist of:
- Genesis traded USD 29.2 bn in area in Q2;
- the trading desk increased electronic execution from 32.5% of all trading activity to over 42%; regardless of a total market trading volume contraction of 33% and a market capitalization fall of 20%, the trading desk produced volume simply 7% lower than Q1;
- custody increased the variety of onboarded entities by 22% quarter-over-quarter with 63% of Custody clients likewise having a trading and/or loaning account with the business.
Additionally, bitcoin trading represented some 47% of the company’s total area trading activity, below approximately 80% in Q2 2020. Ethereum (ETH) took the majority of that share, representing some 25% of total volumes on the desk.
There’s likewise an obvious ongoing need for altcoins, the report stated.
According to Matt Ballensweig, Head of Institutional Lending at Genesis, patterns in Genesis’s activity and the wider market "confirm the changing role of bitcoin as the industry’s gateway asset, and highlight the emerging protagonism of Ethereum and decentralized finance" (DeFi).
Bitcoin’s market supremacy decreased from over 70% at the end of 2020 to under 45% at the end of Q2, he stated, while ETH and "most of the main" DeFi tokens more than doubled in rate given that the start of 2021.
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