Genesis Reports Continued Growth in Demand for ETH Compared to BTC in Q3

Solana, Terra, Avalanche and Fantom among the layer-1s challenging Ethereum.

article-image

Source: Shutterstock

share

key takeaways

  • Ethereum loans increased to 32% of Genesis’s total book, up from 27.9% during the second quarter
  • Incentive programs have catalyzed cross-chain activity, leading to a reduction of ETH’s market share in favor of competing layer-1s

The third quarter was marked by traditional finance moving into crypto, a market rotation into layer-1 tokens and growing institutional interest in DeFi, according to a report published by Genesis on Thursday. 

The New York-based company’s loan originations reached $35.7 billion, a company record that was up over 586% year-on-year and represented an increase of 40% versus the prior quarter.

While bitcoin loans increased overall, the composition of the loan book continued to rotate. BTC loans accounted for 32.4% of outstanding loans, down from 42.3% at the end of the second quarter, while ETH loans increased to 32% of the total book, up from 27.9% in Q2.

It was the first time ETH loans reached more than 30% of Genesis’ total loan book, according to Genesis Market Insights Head Noelle Acheson, who pointed to a trend of greater borrowing appetite in ETH from institutions to post as collateral or liquidity pairs across DeFi applications.

“BTC continues to function as a gateway asset, but we are seeing institutional investors express growing interest in diversifying their crypto portfolio,” she told Blockworks. “We expect this interest in greater diversification and demand for ETH to continue.”

Though interest from crypto-native institutions has shifted away from bitcoin to Ethereum and DeFi tokens, the listing of the first bitcoin futures ETFs last month served as a catalyst for the widening of the BTC basis, the Genesis report states. This could continue as more organic flow from traditional institutions, 401(k) accounts and registered investment advisors enter the market, it adds.

The third quarter also brought the acceleration in the development of emerging layer-1 protocols, both in terms of technology and community, Acheson noted. 

While layer-1s compete on transaction speed and security, incentive programs have sparked cross-chain activity, leading to a reduction of Ethereum’s market share in favor of competitors such as Solana (SOL), Terra (LUNA), Avalanche (AVAX) and Fantom (FTM), the report states.

Avalanche announced in August a $180 million liquidity mining incentive program that brought DeFi protocols Aave and Curve to the Avalanche public blockchain.

Rotation into these protocols outpaced the market capitalization gains of Ethereum alternatives such as Binance Smart Chain (BSC), Polkadot (DOT) and Polygon (MATIC) seen during the second quarter, the research adds.

“Over the next few months we’re excited to see how development across the ecosystem can support progress on individual blockchains as well as the interplay between them, offering new opportunities for diversification and attracting new types of investors into the crypto markets,” Acheson said.

The report comes as Ethereum reached an all-time high above $4,600 on Wednesday. The asset’s price had fallen to 4,517.75 as of 5 pm ET on Thursday, according to CoinGecko.

Mikkel Morch, executive director at crypto hedge fund ARK36, noted that Ethereum has now outperformed bitcoin almost five times in terms of year-to-date returns.  

“As this current bull market is heating up and as DeFi and NFTs continue to enter the mainstream ever more decisively,” he said, “Ethereum seems to be on a path to a double digit price tag within the next few months.”

Tags

    Upcoming Events

    Old Billingsgate

    Mon - Wed, October 13 - 15, 2025

    Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

    Industry City | Brooklyn, NY

    TUES - THURS, JUNE 24 - 26, 2025

    Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

    Brooklyn, NY

    SUN - MON, JUN. 22 - 23, 2025

    Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

    recent research

    Featured.png

    Research

    Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

    article-image

    The DeFi Education Fund has ideas on how the crypto-friendly SEC can bring Commissioner Peirce’s vision to life

    article-image

    “Be prepared to do more with less,” Framework Ventures’ Michael Anderson said

    article-image

    Q1 may have been “frustrating,” but things are looking brighter for Q2

    article-image

    Tokens worth 20% of the current supply of the TRUMP memecoin launched by the president are set to be unlocked tomorrow

    article-image

    A crypto-industry lawsuit is “moot” now that Joint Resolution 25 has been signed into law

    article-image

    Fed Chair Powell assured markets that the labor market is in “good place,” dependent on price stability