Cryptocurrency lending firm Genesis Capital reported massive growth in borrows in the last quarter of 2018. Altogether, the company processed $1.1 billion last year.
Crypto Loans on the Rise
Genesis Capital – a cryptocurrency lending company, released its Digital Asset Lending Snapshot report.
According to the document, the firm experienced massive growth, originating over $500 million in Q4 of 2018. This is more than the entire amount they’ve originated up until then.
The months of November and December were the most active ones. The document outlines that new hedge funds and trading companies take advantage of spot borrows.
Genesis Capital’s loan book contains $153 million in outstanding active loans – a $20 million increase from Q3 of 2018. This is despite the steep decline of 44 percent in Bitcoin price.
Earlier this month, My Bitcoin News reported that prominent cryptocurrency investor Mike Novogratz is raising $250 million through Galaxy Digital LP in order to create a lending fund. It is targeting cryptocurrency and blockchain-oriented companies.
Bitcoin (BTC) Leading the Loan Portfolio
Genesis Capital also revealed their yearly asset composition. According to the report, 60% of its loan portfolio leading into Q4 consisted of Bitcoin, while the other 40 consisted of altcoins where XRP constituted 50% of them.
The document also says that before Q4 of 2018, 98% of the loaned BTC was used for hedging cases such as remittance, basis capture, and arbitrage.
However, the 16% decline in Bitcoin’s price on November 14th had triggered an increase in loan origination for as short positions started to pile at an ‘unprecedented size’. According to Genesis, a lot of the borrowers shorted directly, increasing the sell-side volume massively in the latter half of Q4.
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Images credit to Unsplash; Genesis Capital