In their statement, the popular crypto lending platform, Genesis, declares the second quarter as “one of the most dramatic in the crypto ecosystem’s history.” Their loans dropped from $14.6 billion in the first quarter to $4.9 billion in Q2 as challenging credit markets threw them off balance.
In the first quarter, its loan book comprised about 54% of US dollars and its equivalents, and they regarded it as a “flight to quality.” But right now, Bitcoin makes up most of their loan book, with BTC loan weight rising from 28.7% to 30.4%.
On Wednesday, Genesis revealed that new loans from its lending desk declined by 9%, while active loans outstanding dropped 66% from the initial period. In 2013, they launched the first over-the-counting bitcoin trading desk in the United States. This aimed to facilitate billions in monthly crypto trades, loans, and transactions.
The Genesis parent company, Digital Currency Group, is absorbing all of Genesis's losses. Although the crypto lending platform had loan exposure to 3AC, Digital Currency Group assumed the liability of losses from these loans.
Regardless of the depreciation in new loans and active loans outstanding, the company’s spot desk still traded about $17.2 billion in the second quarter. This is a 51% increase from the previous quarter, and its derivative desk traded $26.6 billion.
In addition to this, Genesis Custody saw its highest number of quarterly transactions, an 8% increase from the first quarter. They also witnessed a 20% increase in custody clients during this period.
