Genesis Capital, a subsidiary of Genesis Trading has announced its revenues and profits in 2018, which showed a surprising trend of institutions becoming more interested in Bitcoin especially towards the last quarter of last year.
The Bear and the Bull
2018 dragged on for many crypto enthusiasts, and a lot of institutions with stakes in crypto investments felt its grind too. While crypto exchanges, mining industries and even blockchain institutions like ConsenSys had to trim down their staffs in response to the winter bear, Genesis claims November was only the ‘genesis’ of a new record in profits generated.
According to the company, the demand for loans increased significantly in the last quarter of 2018, especially spiking up in November. The company which facilitates loans in Bitcoin (BTC), while pegging fiat USD as collateral, revealed that the number of loans surged up in high volumes towards the end of the year, and amidst the winter decline due to a number of triggering factors.
Genesis capital facilitates the action of high volume speculative short-selling on the market at spot prices, and Bitcoin emerged the biggest digital asset in their list, leading Bitcoin Cash (BCH) and Ethereum (ETH) to make up 75 per cent of their total interest. The company recorded a massive surge in loans of more than $600 million from a previous cumulative of $800million.
At the end of the year, the company’s loan account stood at a staggering $1.113 billion, an increase of more than 100 per cent compared to the previous year. The company explained the sudden surge, attributing it to fluctuations in the price of BTC. It said:
“On Nov. 14, the price of BTC moved 16% in a single day, which jump-started a period of increased loan originations as short sellers piled on with unprecedented size. Many long-short hedge funds viewed breaking the $6,000 price floor as an accelerator through $5,000 and into the $4,000 range.”
The development is seen as welcome news to long term bitcoin holders and speculators. The continued interest of institutions in Bitcoin only serves to further drive its value and the faith in it.
“Most clients are using the cash to invest, sometimes even in the same asset, they posted as collateral to with most clients,” Genesis stated.
By offering a similar loan situation (but in reversal) and facilitating loans in USD which on the other hand holds BTC as collateral, proves the solid faith and initiative that enthusiasts are going long with BTC love.
The company has expressed more optimism in 2019 as it sees BTC breaking more grounds this year.