Crypto lender Genesis provided $5.2 billion in new loans in the third quarter of 2020, more than double its previous record of $2.2 billion in the preceding quarter.
Issued to corporate borrowers such as hedge funds and trading firms, the loans are mainly denominated in bitcoin (BTC), ether (ETH), bitcoin cash (BCH), and cash.
According to the U.S. company’s Q3 Digital Asset Report shared with news.Bitcoin.com on Oct. 30, Genesis grew its active loans outstanding 50% to $2.1 billion from $1.4 billion in the second quarter.
Altogether, Genesis has processed a total of $13.6 billion worth of crypto loans since it started its lending business in March 2018.
As a percentage of the total loan portofolio, bitcoin-based loans fell sharply in Q3, tanking to 40.8% from 51.2% previously. BCH loans almost remained stagnant at 4.3% while ETH borrowing nearly doubled to 12.4%.
“The main driver of this portfolio shift came from the impact of liquidity mining on decentralized finance (defi) protocols,” said Genesis.
“We saw defi interest rate arbitrage drive significant new issuance where our trading counterparties started actively borrowing ETH and stablecoins to lever up liquidity mining strategies. These counterparties, at the same time, borrowed the associated governance tokens such as UNI, YFI, COMP, and LEND to hedge their future in-kind earnings.”
The lender says it is seeing massive growth across all its business lines, including derivatives and spot trading.
In the review quarter, derivatives volume – both options and futures – soared 150% to $1 billion from $400 million previously. Genesis only started trading derivatives in Q2 2020. Spot volume rose about 15% quarter-on-quarter to $4.5 billion, it said.
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