Genesis Capital, one of the largest providers of crypto loans, cracked $1 billion in crypto loans in 2018. Despite falling bitcoin prices, the demand for credit in the crypto money market seems higher than ever.
In the fourth quarter of 2018 alone, Genesis, a type of crypto bank, will provide $500 million in loans. As a result, the US company accounts for almost half of its total lending volume in the fourth quarter of 2018; In total $1.1 billion in loans. The market is booming — and after the already south-facing market lost further value in November and December. This emerges from the quarterly report of the company.
Genesis benefits from price turbulence
According to Genesis, it should be mainly due to the price collapse on November 14th of last year, that there was a veritable run on crypto-credit. In short, traders got liquidity from crypto-lending companies to grow their short positions.
Finally, debtors and creditors profited from the collapse of the market. This, in turn, means that the volume of credit at Genesis currently knows only one direction, namely upwards.
Bitcoin stronger than ever
Investors can borrow a number of alternative cryptocurrencies from Genesis besides Bitcoin. Among the supported Altcoins include Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), XRP and Litecoin (LTC).
Meanwhile, the undisputed top dog is still called bitcoin with an upward trend.
In addition, the business model for this demand structure seems to be a goldmine itself, especially for Genesis itself. As Bitcoin.com reports, the institute borrows liquidity from other providers at interest rates of around five to seven percent. However, the crypto-lender pays out lent loans by ten to eleven percent. The potential margin is immense.
Lending to the Moon
This may be one of the reasons why the crypto lending business is on the rise. As one of the few subsectors in crypto-space, lenders like Genesis are also making a profit during the ongoing bear market.