Oriented to institutional investors, the lender Genesis Global Capital, a division within the brokerage company Genesis Global Trading from the business empire of Barry Silbert, processed $ 425 million in cryptocurrency loans in the first quarter of 2019. Since launch in March 2018, a total of $ 1.53 billion has passed through the firm.
We're proud of the highlight of $ 205 million in new loan applications, since inception last year https://t.co/Un62bzYB4T
– Genesis Capital (@Gen_Capital) April 25, 2019
Since the end of last year, the portfolio of loans outstanding to the company has grown by 17% to $ 181 million, but the average maturity is still six weeks. The share of loans in Bitcoin was 68%, XRP – 6.7% and Ethereum – 3.6%.
At the same time, the share of shortsists among borrowers significantly decreased – up to 3-5% of the total number. Thus, the main customers of Genesis Global Capital are the stock exchanges and OTC platforms, which prefer to keep users' funds in cold stores, and to provide trades with borrowed coins.
The company itself takes the coins from large players at 4-5% per annum, and gives them a loan at 6.5-7.5%.
Meanwhile, the direction of fiat loans is still in its infancy and is responsible for only 10% of the company's turnover. Such loans are secured by cryptocurrencies in the amount of 120% of the loan, and margin call occurs when the value of these assets falls below 105%.
Recall that in 2018, Genesis Global Capital processed $ 1.1 billion in cryptocurrency loans, with the most active being the last three months of the year, which accounted for more than $ 500 million.
It is worth adding that cryptocurrency lending is an extremely active sector outside the United States, particularly in China. There, this niche was occupied by investment funds Bixin Capital, FBG Capital and DGroup, as well as startup Babelbank, which have issued loans for $ 60 million over the past five months. It is noteworthy that the direction of fiat loans is more popular in China.
Kriptovalyutnye investment funds of China issued loans of $ 60 million in just five months https://t.co/gsJOnt3FHf # China # loans
– BlockchainJournal (@BlockchainJournal) April 10, 2019
Successes in the field of cryptocurrency lending are made by startups such as Nexo and BlockFi. Thus, the first one processed about $ 300 million in seven months and received a net profit of $ 3 million. The second one, in partnership with Gemini Trust Company LLC, launched cryptodeposit accounts [Bitcoin and Ethereum] with an annual yield of 6.2%.
Mike Novograts's Galaxy Digital cryptocurrency bank, which intends to raise $ 250 million for issuing loans to cryptocurrency startups in distress, is also seeking to occupy its niche in the sector.
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