The cryptocurrency lender’s book of active trading loans increased 118% from the end of the first quarter to $1.4 billion at mid-year, the firm disclosed Tuesday. The blistering pace of growth was likely an anomaly, the company said.
“The 100% growth rate in our loans is a function of the fact that we cut our data set at about March 31,” Genesis CEO Michael Moro said in an interview. “To think that our loans outstanding would grow by over 100% in just three months going forward is probably unrealistic.”
The business took a hit when bitcoin, along with the mainstream financial markets, tumbled on coronavirus fears late in the first quarter. The fast comeback signals that crypto borrowing remains a popular tool for arbitrage among professional traders. They typically borrow fiat and put up crypto as collateral, or vice versa, or pledge one crypto asset as security for another.
Genesis Capital is the lending arm of Genesis Trading, itself a subsidiary of Digital Currency Group (DCG), which is also the parent company of CoinDesk.
Market chatter recently has focused on lending practices of the leading firms in the niche. As CoinDesk reported last week, Genesis’