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Crypto Lending Giant Genesis Caps Off Stellar 2019 with a Record-Breaking Q4

Genesis Global Capital, one of the top institutional lending firms in the cryptocurrency space, has announced yet another quarter of impressive demand from both international clients and borrowers.

Earlier this week, the company published its report for the fourth quarter of 2019, announcing that it issued over $1 billion in loans across the last three months of the year. That number alone saw an impressive 34.8 percent increase from the figures published in Q3. The report noted that the firm had a total of $545 million outstanding loans as of December 2019.

Derivatives Traders Drive Loan Adoption

The performance underscored what was a rather good year for Genesis, buoyed in no small part by the ability of the crypto market to bounce back from a shaky 2018. The company pointed out that the demand for cash loans was also on the rise, highlighting that cash and Bitcoin loans comprised of 84.5 percent of its total outstanding loans.

It attributed the rise to the desire of derivatives traders to take advantage of the rich premiums of Bitcoin futures to the Bitcoin spot price. These traders also showed a high proclivity for borrowing cash to strengthen their positions on derivatives markets. The trading desk predicted that as long as premiums still exist in the market in 2020, this trend shouldn’t buck. However, factors such as free-market entry, heightened operational efficiencies across exchanges, and increased cash supply in the market could see the growth slow down a bit.

The trading desk is also seeing a strong demand for loans from Chinese miners, attributing this surge to the desire for these miners to scale up their operations and prepare for the halving- an event that many across the industry believe will lead to a surge in the markets. Miners are suspected of wanting to keep a hold on their Bitcoin holdings (so as to directly gain when the prices surge from the halving) and, as a result, will want to collateralize Bitcoin for cash loans to upscale their operations.

Miners Prepping for the Halving

As the industry begins to countdown towards the halving, a lot of eyes will be on the mining space and how players there perform. Mining is an essential activity in the crypto industry, and it doesn’t get as important as when the halving comes around.

Whether individual miners, members of mining pools, or global mining companies, those strategically positioned could benefit immensely from this landmark event. While some are taking in loans to upscale, however, some are also cutting staff and reducing costs as much as they can. Late last month, reports surfaced that Bitmain, the Chinese manufacturer of mining equipment, could lay off about 50 percent of its workforce- much to the chagrin of company workers and ousted company founder and majority shareholder Micree Ketuan Zhan. For now, however, there hasn’t been any action to that effect.

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      Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.