Genesis Capital Crypto Lending Firm Reports $870M in New Originations in Q3

The institutional digital asset lending firm Genesis Capital released its Q3 report, which shows a growing demand for cash and stablecoin lending.

On Oct. 30, Genesis Capital, a spin-off of over-the-counter cryptocurrency broker Genesis Global Trading, reported that the crypto lending firm saw a sustained growth in the lending business in the third quarter of 2019, where they added $870 million in new originations, breaking the previous record of $746 million set in Q2 2019.

Cash and stablecoin loans are in demand

The official report noted that at the end of Q3 cash loans showed a significant increase in the portfolio of Genesis Capital, representing 31.2% of its active loan portfolio, up from 23.5% at the end of Q2 and 14.0% at the end of last year. The report reads:

“Our loan portfolio largely sustained its value through increased cash (USD and stablecoin) loan issuance, offset by a decrease in the notional value of crypto loans outstanding.”

Much like the second quarter, the lending company experienced another “strong demand internationally to borrow USD,” mostly through the procurement of stablecoins such as USD Coin (USDC) and Paxos Standard Token (PAX).

Genesis started 2019 at approximately $20 million outstanding cash loans and “after seeing moderate growth to $40 million towards the end of Q2, Q3 saw nearly a 4x increase in cash loans outstanding, reaching a high of $160 million in mid-September.”  

According to the report, Genesis currently sits at $140 million outstanding cash loans — a decrease from the high of $160 million in December — due to the recent spot selloff from $10,000 per Bitcoin (BTC) to $8,000.

Less demand for Bitcoin loans

Genesis also reported that the share of active Bitcoin loans has decreased to 50.2%, coming from 68.1% at the end of Q1. The report states that this is mainly due to the new U.S. dollar issuance in Q3, which took share away from active BTC loans as altcoin demand increased slightly. Altcoin loans on the other hand, have grown in popularity in Q3, with Ether (ETH) having increased to 7.5% from less than 4% the previous quarter. 

Genesis Capital partners with Bitcoin IRA 

In October, Los Angeles-based BitcoinIRA partnered with Genesis Capital to offer investors the opportunity to earn interest on cryptocurrency and cash holdings. BitcoinIRA COO Chris Kline argued that adding interest-earning accounts to the firm’s crypto and cash lending program would help spur decentralized finance forward, claiming:

“Borrowing and lending using cryptocurrencies and cash are providing new and safe opportunities for our clients to maximize the growth of their retirement accounts. Interest earned by a client can offset trading fees or custodial holding fees, essentially creating a free account making these fees a thing of the past."