Amidst the continuous market slumps, crypto space and related companies are facing tough times and struggling to keep pace
Crypto brokerage firm serves primarily Institutional investors; Genesis reported about $44.3 billion in originating loans backed by digital assets during the first quarter, a slight decline from its $50 billion in previous quarters. This decline is assumed to be due to large sell-offs that have been seen across all the crypto assets, as Genesis wrote itself in its earning report for the first quarter on Friday.
The lending business of Genesis focuses on lending to institutions like crypto funds and others for investment hedging and digital assets shorting. The brokerage firm has issued about $195 billion in loans since its lending platform launched in 2018.
Genesis said that despite the recent volatility in the crypto market, many new institutions are entering the market and have shown strong demand for several cash loans since this past quarter.
CEO of Genesis, Michael Moro, said in a statement that Institutions are continuously developing their crypto strategies and trying to strengthen their understanding of the industry. Amidst the uncertainty in the market that has been marked from the start of the year. As the company is continuously deepening engagements with its clients across the wide range of products of Genesis, they are committed to further expanding its market share, and innovative strategies will be delivered to clients in order to access the fast-paced, growing asset class.
The trading desk of Genesis has grown during the first quarter of 2022. The ideological derivative volume, which also includes negotiated block and exchange-traded futures traded, has reached upto $27.8 billion during the same quarter, up by 33% from the last quarter of 2021. Investors gradually show less interest in single asset portfolios, especially in the case of bitcoin, as the Genesis report said.
The report also mentioned that since mid-2021, the company had noted a macro trend in which Bitcoin (BTC) was becoming a smaller portion of their portfolio mix, which happened gradually. Many clients focused on decentralized finance funding opportunities in several native layer one blockchain and sometimes offered more attractive rates compared to typical blockchain protocols on Ethereum (ETH).
The report also mentioned that a possible explanation for this is that there is little opportunity left in bitcoin cash and carry basis trades following the three-month trailing and compressed-based three months in the first quarter. Similar trends can be observed with the trades based on the Ethereum network that used to trade at a higher premium to bitcoin.
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Source: https://www.thecoinrepublic.com/2022/04/30/what-made-crypto-brokerage-genesis-lead-a-decline-in-q1-as-per-reports/