Genesis Global Trading Has Lent Over $ 500 Million In Cryptoactives To Institutional Investors
One of the largest over-the-counter cryptocurrency dealers, Genesis Global Trading, reported that it has lent over $ 500 million in digital assets to institutional clients, including hedge funds and other financial institutions.
The New York based company began issuing cryptocurrency loans in March of this year and at the moment its balance is $130 million on active loans denominated in BTC, ETH, XRP, BCH and other currencies. The company specified that the main purpose of borrowers, for which they take credit – a game to lower the prices of digital assets, as well as hedging investment positions.
The service has become so popular that the company had to borrow most of the funds from other major holders of cryptocurrencies. Executive Director of the company Michael Moro said that since March the amount of loans was $553 million.
Some of the largest loans were made in Ethereum by hedge funds, which used these funds to play on lowering the price of the asset, Genesis clarifies. But since the beginning of the company’s activity, the rate of the second cryptocurrency fell by 80% and interest in the service weakened. As of September, only 4% of all credited funds fall on the ether, while the majority — on bitcoin.
Michael Moro also noted that the lion’s share of funds is used to hedge positions opened in December last year in the derivatives markets. According to him, Genesis takes money in debt at 5-7% and gives them to its customers at 10-11%. In the future, the company plans to publish quarterly reports on the flow of credit funds.
It is worth noting that Genesis in May this year received a special BitLicense for its activities from NYDFS.