Crypto Brokerage Genesis Reports Q1 Lending Decline as Market Slump Continues

As the market sell-off continues, bitcoin is playing a smaller role in institutional portfolios, the company said


blockworks exclusive art by axel rangel


key takeaways

  • Genesis reported $44.3 billion in originated loans during the first three months of 2022
  • Institutional investors are becoming less interested in bitcoin, the report noted

Institutional investor cryptocurrency brokerage Genesis reported $44.3 billion in originated digital asset-backed loans during the first quarter, a decline from the previous quarter’s $50 billion. 

The decline is due to a large sell-off across all cryptoassets, Genesis wrote in a first quarter earnings report Friday. Valuations across the space are nearly half of what they were in November, the report added. 

Genesis’ lending business focuses on lending to crypto funds and other institutions for hedging investments or shorting digital assets. The brokerage has issued $195 billion in loans since the launch of the lending platform in 2018. 

Despite recent volatility, new institutions entering the market have shown strong demand for cash loans this past quarter, Genesis said. 

“Institutions continue to develop their crypto strategies and strengthen their understanding of this industry, even amid the market uncertainty that has marked the start to this year,” CEO Michael Moro said in a statement. “As we continue to deepen engagement with our clients across Genesis’ wide range of products, we are committed to further expanding our market share and delivering innovative strategies for clients to access this growing asset class.”

Genesis’ trading desk grew during the first quarter of the year. The notional derivatives volume — including negotiated block- and exchange-traded futures — traded reached $27.8 billion during the quarter, up 33% from the fourth quarter of 2021. 

Investors are becoming less interested in single-asset portfolios, especially when it comes to bitcoin, Genesis said in the report. 

“Since the middle of last year, we noted a macro trend occurring in which BTC was gradually becoming a smaller proportion of our portfolio mix,” the report said. “Many clients are also focused on [decentralized finance] funding opportunities in these native layer-1 blockchains, sometimes offering more attractive rates than in typical ETH blockchain protocols.” 

A possible explanation: There is little opportunity in bitcoin cash and carry basis trades, as the three-month trailing and three-month basis compressed in the first quarter, the report said. The same trend can be observed in ethereum basis trades, which used to trade at a slight premium to bitcoin.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

ao cover.jpg


Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.


Ore’s price more than tripled as the supply of new tokens paused


I spend an unhealthy amount of time thinking about crypto securities law — and I can’t see how ETH is now a securities offering under Howey


Regulators in South Korea, Japan and Singapore could follow Hong Kong’s lead as Asia responds to spot bitcoin ETF approval in the US


Martin Grant worked with the Fed for roughly 30 years before leaving his position in 2022


BitGo CEO Mike Belshe shared his thoughts on the halving and bitcoin ETFs in an interview with Blockworks


Crypto markets were largely the only ones open over a tense weekend, and they took a beating for it