Genesis, an industry pioneer and leader in digital currency prime brokerage services, today released its Q2 2020 Market Observations report. The report provides a detailed look at the firm’s Q2 results in the midst of the COVID-19 pandemic – including over $7.5B in trades and new loan originations – and expands in format to include insights from the company’s lending, spot and derivatives trading desks.
Across a record Q2, Genesis saw $5.2B in spot trading volume, up $1.2B from the first quarter of the year. The company’s lending business added over $2.2B in originations, marking the lending group’s largest quarter ever with a 324% increase in originations y/y. Active loans outstanding increased 118% from Q1, and cumulative originations increased for a ninth consecutive quarter, with total originations reaching $8.4B since March 2018.
Genesis launched its derivatives trading desk at the end of May. In its first full active month, the desk traded $400mm notional across forwards and options with nearly 50 active counterparties across 10 different assets. Approximately 67% of volume for the quarter was executed bilaterally and the remaining 33% was executed on exchange.
Through its Q2 2020 Market Observations report, Genesis provides an expanded, holistic view of the digital currency marketplace. The company offers color on key industry trends, insights into successful market strategies, and analyses on:
- The specific trades Genesis has seen and the biggest themes driving them
- The three most prevalent forms of yield generation – spot lending, call overwriting and liquidity mining – and what’s behind each
- How lending structure, monthly interest payments and access to long exposure to loaned assets is driving growth in direct lending
- The causes for the acceleration in the number of institutional lenders
- The different problems options can solve for different segments of the institutional market
“If we had to reduce the information from the Q2 report into three words, they would be ‘demand for yield,’” said Michael Moro, CEO of Genesis. “There was an unprecedented desire for digital currency yield generation in the form of spot lending, call option overwriting and liquidity mining on DeFi protocols. This all signals that market participants are seeking varying, rigorous methods to generate yield that correspond with their risk appetites.”
To read the full Q2 2020 Market Observations report, click here. Additionally, follow these links for more information about Genesis’ recent acquisition of digital custodian Vo1t and the firm’s launch of a derivatives trading desk and transformation into a digital asset prime brokerage.
A broker-dealer registered with the SEC and FINRA, Genesis Trading facilitates trades for institutional investors and high net worth individuals looking to buy or sell large sums of digital currencies. Genesis provides liquidity to its trading partners, along with same-day settlement, 24/7 trading, and deep institutional expertise developed from trading billions of dollars in digital assets since entering the industry in 2013.
In 2018, Genesis launched its lending business, Genesis Capital, to provide a platform for borrowing and lending digital currencies. To date, Genesis has originated more than $8 billion in loans and borrows. In May 2020, Genesis launched its derivatives trading business.
Genesis is a wholly owned subsidiary of Digital Currency Group. In addition to Genesis, DCG is the parent company of Grayscale Investments, the largest asset manager in the digital currency industry, and CoinDesk, a leading media and events company.
Genesis is a full-service digital currency prime broker. Backed by an expert team of seasoned trading professionals, Genesis provides investors a convenient, robust, and secure marketplace to custody, trade, borrow, and lend digital currencies, creating new opportunities for yield while increasing capital efficiency for our counterparties. Built on the only global over-the-counter trading firm for digital assets registered with the SEC and FINRA, Genesis combines unrivaled operational excellence, a seamless user experience, and best-in-class client service to provide the full suite of asset services global investors require for their digital asset portfolios.