Genesis Global Trading Company, which is a firm that lends cryptocurrencies saw its operations touch $1.114 billion mark in terms of its borrowing and lending. This was confirmed by Digital Asset Lending Snapshot for Q4 2018 which was published recently.
At the closure of Q3 2018, the firm had released the Digital Asset Lending Snapshot for the first time, and it announced that Genesis Global Trading had processed $553 million only till that time from the commencement of its operations in March 2018. With these figures, the company has come to a derivation that Q4 loans have witnessed a rise of more than 100% in the last three months of 2018 if set side by side with six months before that.
The report said, “Over the past year, through client feedback and the rise of derivative marketplaces, we saw a meaningful increase in the number of market participants wanting to borrow and/or lend digital currencies.”
According to the company statistics, they have revealed that though Bitcoin price has fallen by over 44 percent, its lending business has risen to $153 million in active loans, which is $20 million more than the third quarter. Moreover, the company has disclosed that most lively months in terms of transactions thus far were November and December of the last year as fresh hedge funds were seen and trading companies made use of the “spot” borrow.
Genesis Global Trading had also commenced fiat currency grants with crypto as a security. The company reasons its decision behind rendering this new service as an answer to the demands of its institutional customers. It confirmed that investors who are holding their digital assets for a considerable period could ask for cash in exchange for their crypto assets and this would not have much implication on their taxing activities. It stated, “Long-term digital currency investors with appreciated assets can borrow cash against their crypto holdings without triggering a taxable event.”
The firm went ahead to state that the borrowings of Ethereum (ETH) has risen to more than double after Q3, but has managed a figure of less than 10 % of its loan book which is quite low if compared to its highs highlighted in Q1 and Q2.
It stated “The short sellers tend to wait for the price of ethereum to go down before they get in, they’re not the catalyst … What they do is they piggyback … Short sellers probably exacerbate the magnitude of the selloff [but] they joined the crowd, they didn’t start the crowd.”
At the start of January, it was announced that lenders who are dealing in this crypto market business had handled the ongoing bearish market trends in a better way than others in the digital assets league. The chief executive officer of Genesis Global Trading, Michael Maro, outlined that the current negative market has definitely benefited as it has driven development if not anything else.
Moro stated “Depending on the price action in 2019, that will dictate, at least early on in the year, what happens, and will people continue to be willing to borrow for shorting if the price is stable. Maybe, if the price is rising, probably not likely, if the price is falling, yes.”
Not long ago news was doing the rounds that Mike Novogratz’s virtual asset trader bank by the name of Galaxy Digital had acquired somewhere around $250 million mark to execute loans to companies dealing in crypto.